O'Brien Law Firm, LLC - Bankruptcy

Don’t risk your future. We provide knowledgeable, versatile legal services to the Greater Memphis Area.

What to do when facing foreclosure

When Mississippi homeowners fail to make mortgage payments, they could face foreclosure. This means that the lender has decided to take possession of the home. However, there are ways that a person can end or delay the process. The first step in the process is to read any letters that the lender sends as they may offer information about avoiding a foreclosure.

Ideally, a homeowner facing foreclosure will talk to the lender as soon as possible. In many cases, the lender would rather work out an alternate payment plan as opposed to actually going through with a foreclosure. It may be possible to have the loan refinanced or have late payments rolled back into the loan. Depending on a person’s financial situation, it may be worth looking into bankruptcy to stop or delay the foreclosure process.

However, those who file for bankruptcy should be aware that it could significantly reduce their credit scores. The benefit to doing so is that a debtor will obtain an automatic stay against creditor collection actions. This means that the lender cannot follow through with a foreclosure while the bankruptcy case is open. If that isn’t an ideal option for a homeowner, a short sale may be a viable alternative to avoid the negative consequences of a foreclosure.

By filing for bankruptcy, an individual could receive a fresh financial start. He or she may also be able to postpone a foreclosure or the repossession of other property. In some cases, it might be possible to have debts fully discharged in a bankruptcy case. Those who own a home may be able to use an automatic stay as leverage to negotiate new loan terms with their lenders.