The thought of going through foreclosure in a gut wrenching feeling. You have made a purchase on a house that you call home and now the possibility you may lose is starting to become a reality.
For Little Rock families facing foreclosure, most feel a sense of hopelessness. Adding to that pain, the foreclosure process can take months or even years, adding on to this horrible situation.
The good news is that you have options available to you here in Little Rock, maybe even more options than you thought were possible!
We have compiled three ways that you can avoid foreclosure. There are other options out there as well but we feel like these are applicable to the general population. The purpose of these strategies are two main things: 1) reduce the financial burden both short term and long term and 2) allow you to move on with your life quickly and avoid the pain and frustration of that foreclosure brings to families. These three strategies will not be applicable to all situations but choose one that you feels fits best for you.
Strategy #1: Talk to Your Bank
The first strategy is called a “mortgage workout agreement”. In a mortgage workout agreement, you’ll talk with your lender and explain your situation with them. Be honest and let them know you can no longer afford your payments but you want to keep the property and try and figure out some sort of arrangement.
Trust us when we say this: banks DO NOT want to foreclose on properties! They want their borrowers to continue paying mortgages, so lenders are often willing to work with homeowners to figure out a modified deal. This might be something like a short-term postponement on your mortgage payments, or it might include a payment plan so that the outstanding balance that you owe is spread out. We’ve also seen lenders restructuring the terms all together
Strategy #2. Bankruptcy
Bankruptcy is a word that carried a lot of weight to it, often having a negative tone. Bankruptcy should not been seen as a punishment or negative consequence but rather a tool to use to your advantage. When you file for bankruptcy, you are telling all of your lenders/creditors that you no longer can pay. What this means for foreclosure is that if you file for bankruptcy, the lenders can no longer foreclosure on the house because you have force stopped payments.
Now, don’t get us wrong, this will still have a negative impact on you as you may be required to sell off any assets you own to pay off your lenders.It’s also important to add that a bankruptcy will be on you credit report for many many years.
Strategy #3. Short sale help for a foreclosure in Little Rock
A short sale is the third strategy — a short sale is when you sell your home and put the profits toward what you owe on the mortgage. This is the method that has the least negative consequences and can be done quickly and effortlessly.
- It’s a preventative approach, which means you are solving the problem before it happens.
- It’s fast — in some cases, you can sell your home in as little as a week! You can get help for foreclosure in Little Rock since companies like Sunny Day Homes LLC help people going through short sales.
- This is the most effective way to eliminate what is owed on your mortgage!
With a short sale, you still end up with the reality of having to leave your home but there is a bright side: The impact to your credit is much less (compared to a bankruptcy or a foreclosure) so this is a smart long-term play to give yourself some options.