Bankruptcy

Bankruptcy can help stop or delay an auction, however if you are not approved for Chapter 13 then your property will go right back on the auction list the next month.  45 days after filing for bankruptcy you will have a 341 hearing. At the hearing you will be questioned about your assets, liabilities and financial condition and you will have to prove that you could pay all of your creditors.  You will have to show proof like bank statement, tax forms, and paystubs. 

Loan Modification

If you qualify for a loan modification, your lender may reduce your monthly mortgage payment by extending the life of your loan or refinancing your loan. You will only get approved for a loan modification if your credit health is good, and you can prove that you can repay future payments and have good overall financial health. 

Request a Deed in Lieu

Requesting a deed in lieu is beneficial for both the homeowner and the lender.  You will still have to vacate the property and relocate, but the lender forgives the debt. This can avoid costly court time and the details can be kept more private than if the property were put up for public auction. 

Short Sale

Short sales are not simple but if your house is headed to foreclosure, then it’s certainly worth looking into your options. A short-sale has to be approved by the lender. The house is put on sale and once an offer is obtained and accepted, the lender will forgive the original home-owner’s debt. This process allows the homeowner to avoid foreclosure, the bank to earn some of their money back, and allows a new person to become a homeowner at a discounted price.