If you fall behind on your mortgage payments, your lender may initiate legal action to take back ownership of your home. This process is known as foreclosure. It can be stressful and overwhelming for homeowners, and the abundant misconceptions about foreclosure don't make the situation any easier. Below, the bankruptcy and real estate law attorneys at Arndt Buswell & Thorn S.C. in Sparta, WI, debunk five of the most prevalent myths about foreclosure.

Real Estate Law Attorneys Discuss Misconceptions About Foreclosures

1. A Foreclosure Disappears When You File for Bankruptcy

When you file for bankruptcy, the courts issue an automatic temporary stay on any foreclosures currently in action against you. The stay is not permanent, but it can give you some extra time to figure out a plan and look at your options for retaining your home.

2. Banks Are Just Waiting to Snap Up Homes in Foreclosure

Believe it or not, your lender wants you to succeed. They aren't interested in taking back your home, but they will take steps to do just that if you fall behind on your payment obligations. Don't fall into the trap of thinking your lender is your enemy; they use foreclosure only as a last resort.

3. There Is No Way to Stop a Foreclosure

A foreclosure can be intimidating, but it is not an unstoppable force. If you can gather the money you need to retain your home, most states will still allow you to make your payment and end the foreclosure. Explore this possibility with your bankruptcy and real estate law attorney to better understand how a last-minute payment would work in your jurisdiction.

4. If You Lose Your Home in Foreclosure, You Don't Have to Pay Your Bank's Legal Fees

Unfortunately, in most cases, you do have to pay your lender's legal fees in a foreclosure. Check your mortgage documents thoroughly, reading all the fine print. Banks meticulously cover themselves to guarantee they are out no more money than they absolutely have to be in the event of foreclosure.

5. If You Lose Your Home, You Have No More Ties to It

You may end up paying for a home you no longer own. If, for instance, the bank resells your home for less than the outstanding balance on your mortgage, you must pay the difference. You would also be responsible for paying the interest on that amount.

Let the attorneys at Arndt Buswell & Thorn S.C. guide you through the process of foreclosure. Since 1991, they have helped Monroe and La Crosse County clients in a variety of legal matters, including bankruptcy, real estate law, and family law cases. Call (608) 269-1200 for Sparta or (608) 486-2324 for Bangor, WI, to schedule an appointment, and visit their website.