Does the word “foreclosure” send a chill up your spine? If so, you’re not alone.
After all, your home should be your safe space. And when you lose that space to the bank due to financial hardship, life can take a stressful turn.
But don’t worry, there are steps that you can take to avoid and even stop foreclosure from happening to you and your family. Keep reading for all of the info you need to know about how to avoid foreclosure.
What is Foreclosure?
In order to understand how to effectively stop foreclosure, you must first understand exactly how it works. Let’s break it down.
Simply put, a foreclosure is a home that goes from belonging to an individual to belonging to a bank. This can happen for a number of reasons, but most commonly occurs due to the individual losing their job, extreme debt, or divorce.
1. Don’t Avoid Mail from Your Lender
Although it can be tempting to throw mail from your lender straight into the recycling bin, resist the urge to ignore it. In fact, the earlier notices they send to you may include valuable information that may help you prevent foreclosure.
Later mail could be notifying you about pending legal action. It’s vital that you open, read, and respond to all of these mailings from your lender. Pretending that these notices don’t exist won’t make them go away!
2. Assess Your Assets
Take some time to assess the assets in your life which may be valuable enough to sell for a big chunk of change.
Do you have jewelry, cars, or a life insurance policy which you may be able to trade in for some much-needed cash? Consider selling some of these valuables to help with avoiding foreclosure.
3. Make a Financial Plan
If you’re wondering how to stop foreclosure before it ruins your life, making a financial plan is a helpful step to take. Sit down and map out a clear budget to help get your finances back on track.
4. Do Your Research to Stop Foreclosure
The more that you can learn about foreclosure and the common scams that are attached to it, the better. Arm yourself with knowledge about all the ins and outs of this process so that you can be prepared at every turn.
5. Don’t Be Afraid to Contact Your Lender
In order to avoid foreclosure, you will need to speak with your lender regarding the status of your loan. Although this may seem like an unpleasant task, it is unavoidable.
As soon as you realize that you’re experiencing financial hardship that may result in foreclosure, give your bank a call. After all, they don’t want your house.
And they will have options that can help.
If you feel that foreclosure is impending for you, don’t panic. Follow the guide above in order to stop foreclosure and take back control of your life.
Just remember to make a financial plan, to talk to your lender throughout the process, and to consider selling any valuable assets. Make sure that you continue to research and educate yourself throughout this time to avoid getting scammed!
Want to learn more? For more about topics like this, check out our consumer resources page.