If you're facing financial challenges, the threat of losing your home can be frightening. Most mortgage lenders only allow borrowers to miss three payments before starting foreclosure action. Fortunately, there are ways to stop this. The first step is to hire a lawyer experienced in real estate law. Then, you can explore together one of these possible solutions to foreclosure.

How to Fight Foreclosure

1. Work Out Payment Arrangements

Call your lender and explain your situation. Detail the nature of your financial hardship. Most lenders don't want the stress and hassle of repossessing and auctioning a home, so they’ll likely be open to working out an alternative payment arrangement.

If you can make a payment that satisfies the amount in arrears, inform the lender. But if this isn't an option, see if they're willing to let you repay what you owe by slightly increasing monthly payments until the past-due balance is satisfied. Also, ask if they'd be willing to forgive the debt outright.

2. Refinance Your Home Loan

Another way to get out of foreclosure is to refinance with a new home loan. This involves taking out a new mortgage that encompasses the remaining balance on the home, the past-due amount, and any associated fees and penalties.

Before agreeing to refinance, discuss this option with your lawyer to see if you're a good candidate. In most situations, a borrower must have equity in the home and a positive credit history to qualify for refinancing.

3. File for Bankruptcy

Bankruptcy will institute a temporary automatic stay on any foreclosure action. This is usually a last resort when methods like those above have failed. Consult your lawyer about the benefits and drawbacks of bankruptcy.

Chapter 7 bankruptcy, which eliminates most unsecured debts, may ultimately require you to sell the home to liquidate your debts. In Chapter 13 bankruptcy, which restructures debt into a long-term repayment plan, you may be able to keep the home, as long as you can pay the current monthly mortgage in addition to the past-due amount that is part of the repayment plan.

To see what the next best step is when faced with foreclosure, schedule an appointment with a lawyer. The team at D'Agosto & Howe LLC in Shelton, CT, can help. With more than four decades of legal experience, they offer representation to clients throughout Fairfield County. They provide legal guidance in real estate, personal and work injury, family law, and criminal defense cases. Call (203) 712-0210 or visit them online to arrange a free consultation.