Dealing with debt is never pretty and in some cases, it gets uglier than most people could ever imagine. Many people who are struggling financially will miss mortgage payments, which puts them at risk of losing their home. If you are in this situation, it’s important to seek help from a bankruptcy attorney.

Taking action as soon as possible is the key to saving your home. If you are in a bad financial situation for any reason, take action as soon as possible to save your home from being foreclosed. Here are some of the steps you should take to stop foreclosure:

Contact Your Lender

It’s important to contact your lender to discuss your financial situation as quickly as possible. Lenders ideally want their borrowers to make on-time payments every month, but if a borrower is struggling financially, they may be able to come up with a temporary solution. Some of the options that a lender may consider include:


Lenders may choose to grant borrowers a temporary suspension of their mortgage payments, which is referred to as forbearance. In other cases, a lender may choose to instead reduce the amount of money due to be paid monthly by the borrower.

Either way, the debtor will be required to make all missed payments at a later date. Lenders typically only agree to this arrangement when it can be proven that the debtor will be receiving money in the near future. For example, if the debtor is unemployed but starting a new job in two months, the lender may agree to pause payments until the debtor begins earning an income again. 

Loan Modification

The lender may also agree to make certain changes to the original terms of the mortgage agreement. The modification made to the original terms will be tailored to offer borrowers a more flexible payment plan.

For example, the lender may agree to lower the interest rate, reduce the principal amount owed, or extend the term of the mortgage. All three of these modifications would lower the monthly mortgage payment, which makes it easier for someone who is struggling financially to make these payments.

Repayment Plan

The lender may also agree to a repayment plan which allows the borrower to pay a portion of the defaulted monthly payment each month in addition to the current monthly payment. However, this is only an option for people who are capable of making these large payments every month.

Mortgage Refinance

A mortgage refinance option is available to borrowers who have a certain percentage of equity in the home, good credit, and a steady income. By refinancing your mortgage, you may be able to reduce the interest rate or obtain other favorable terms that lower your monthly mortgage payment.

However, there are fees associated with refinancing a mortgage, so you will have to spend money in order to take advantage of this option.

File for Bankruptcy

Filing for bankruptcy is one of the ways to deal with mortgage foreclosure. However, this is a drastic step that should be seen as a last resort.

Filing for bankruptcy will trigger an automatic stay, which will temporarily prevent creditors from collecting debts. The automatic stay will pause foreclosure proceedings so you have more time to sort out your finances.

This temporary pause in collection activities ends once the bankruptcy case has been closed. As a result, lenders are allowed to continue with foreclosure proceedings once the bankruptcy case is closed. But this does not mean that you will automatically lose your home.

If you file for Chapter 7 bankruptcy, most of your debts will be discharged. This does not include your mortgage debt. However, you may be in a better financial position to catch up on mortgage payments now that your other debts have been cleared. For this reason, many people who file for Chapter 7 are able to stop foreclosure.

If you file for Chapter 13 bankruptcy, your missed mortgage payments must be incorporated into your repayment plan. However, you won’t have to pay them all at once. Instead, these missed payments are spread over the course of three to five years, which makes them more manageable. This allows most people who file for Chapter 13 bankruptcy to catch up on payments and keep their home.

Sell Your Home

Another way to deal with foreclosure is to sell the home. If the home has gone up significantly in value since you purchased it, selling it may be a great way to get out of financial trouble. In the event that the home’s overall value is less than the amount owed on the mortgage, you may be able to request a short sale from the lender. That is, the lender agrees to sell off the home at a lesser value.