Money problems can arise at any time and have far-reaching consequences, including foreclosure. People are often surprised at the variety of circumstances that can affect their homeownership status, even if they or someone they know is experiencing one. This overview shows how different factors can lead to foreclosure, so you can better prepare your household to deal with these situations.

4 Ways Money Problems Can Lead to a Foreclosure

1. The Interest Rate Rises

One of the top reasons homeowners end up facing foreclosure is when an adjustable interest rate rises. This can lead to drastically higher monthly mortgage payments that can derail the homeowner’s budget. As they try to keep their heads above water and stop foreclosure, they only fall further behind.

2. Loss of Employment

Suddenly losing a job is one of the fastest ways to end up in foreclosure, depending on how long it takes to find a new source of income. Even those with considerable savings may burn through that money in a few months, leaving them with money problems they never expected to experience. The lack of money leads to poor financial decisions, such as skipping a mortgage payment to meet other needs. It won’t take long for the bank to foreclose on the property, forcing the homeowner into a more dire situation.

3. Credit Card Debt

Credit card debt can create a financially crippling situation, leaving many homeowners desperate for a realistic solution. In many cases, homeowners choose foreclosure over bankruptcy only to be left in a situation in which they will have to file for bankruptcy anyway. If you find yourself facing this choice, it’s better to consult an experienced debt relief attorney so you can make an informed choice.

4. Sudden Need for Medical Care

Many homeowners face extreme financial hardships as a result of their need for medical treatment. This can include treatment for a serious injury or illness, or it can involve coping with drug or alcohol addiction. In either situation, the cost of dealing with the condition and obtaining treatment can rise very quickly. This can lead homeowners to fall behind on payments or risk a second home mortgage to cover these expenses.

Money problems often come on quickly and leave people with few resources to financially recover. If you are facing financial difficulties and want to avoid home foreclosure, the Law Office of James B. Mallory III can offer you the help you need. Located in Statesville, NC, the firm has been offering bankruptcy and debt relief services for over 28 years. Before you make a decision that will have long-lasting consequences on your financial situation, schedule a consultation by visiting their website or calling (704) 872-1911.