Homeowners with missed mortgage payments are typically anxious about foreclosure. However, knowing more about the process can alleviate the stress of losing the property. Below are answers to a few common questions about this repossession, including ways to prevent it.

What You Need to Know About Foreclosure

What happens during the process?

Foreclosures involve lenders' repossession of properties after homeowners miss several mortgage payments. Federal law dictates that it can only begin after 120 days of delinquent payments. If the homeowner fails to negotiate with the lender or successfully mounts a defense, they must leave the property. Foreclosures impact homeowners' credit scores and can affect their future house purchases.

How long does it take to complete?

Timelines vary depending on state law and the circumstances surrounding the case. In general, foreclosures take about six months to over a year to complete. If you fail to answer your lender's lawsuit or lose at trial, the court then orders a foreclosure sale. But if you successfully defend your case, the process may take over a year. A few defenses you can use include procedural errors and violation of rights.

Can you negotiate with the lender to prevent it?

There are several temporary and permanent options to avoid losing your home. Many owners negotiate with their lenders or banks to modify the mortgage. This option may involve reduced monthly payments, lower interest rates, revised terms, or late payment agreements. Owners can also ask for mortgage refinancing, which is beneficial if they have already lost considerable equity.

Can filing for bankruptcy prevent foreclosure?

While filing for bankruptcy is no guarantee that you can avoid losing the property, it can delay the process. Bankruptcy triggers an automatic stay, and lenders cannot proceed with foreclosure while this is in effect. Nevertheless, they can request to lift the stay and continue with the legal process. Remember that if you file Chapter 13 bankruptcy, you can keep your home and maintain your mortgage under a repayment plan.

Find out more about home foreclosures and potential defenses by turning to Bender & Bender in Wisconsin Rapids, WI. This local law firm's experienced and compassionate attorneys handle cases involving bankruptcy law, creditor negotiations, and debt relief options. Schedule your initial consultation by giving them a call today at (715) 423-4400. Learn more about their services online.