While nobody wants to lose their home, there are some scenarios in which a home foreclosure may actually be beneficial to your situation. A foreclosure will undoubtedly have an impact on your financial future, but it might also be the right step to take to get you back on more solid financial footing. How can you know when home foreclosure is right for you? Below, bankruptcy lawyer Robert A. Schwartz in Rochester, NY, discusses three scenarios where foreclosure might be a logical next move.
You Simply Cannot Repay What You Owe
If you just can't repay what you owe on your home—what's in arrears, your current monthly mortgage obligations, or both—foreclosure could help you get out from under the weight of a suffocating financial obligation. But remember, you will lose your home, and your credit will take a serious and significant hit. If an inability to pay is the only reason, check out alternatives first; a short sale, for instance, could have a less negative impact on your credit.
You Need Time
While it is always advisable to get a home foreclosure over with as quickly as possible, some in the early stages of foreclosure may need time to explore alternatives or make other living/employment arrangements. Once you are notified of the foreclosure, there is typically an extended period of time before the foreclosure is finally granted; in some cases, this could be a year or more.
During this period, you could conceivably live in your home rent- and mortgage-free while you make a Plan B. After the foreclosure is approved, you then have a doable strategy for getting back on your feet—just be sure to do the hard work of planning and arranging while the foreclosure is in process.
You File Bankruptcy & Want to Sell Your Assets
If you file for bankruptcy, the courts will issue an automatic stay on any foreclosure action that has been initiated against you. This stay can be temporary or permanent, depending on the type of bankruptcy you file and the exact details of your situation. But, the stay can also buy you some valuable time in which you can decide if selling your home or proceeding with the foreclosure may actually be the best way to offset some of your other debts. Obviously, this is a situation to discuss in depth with your bankruptcy lawyer.
If foreclosure is a reality you're dealing with, let bankruptcy and debt relief lawyer Robert A. Schwartz help. For more than three decades, he has been representing clients throughout the Rochester area. Call (585) 334-4270, visit him online, or find him on Facebook or Google+ for a free case evaluation today.