Are Debts Depressing You?

By Author: addison1658a
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Debts can be very stressful and leave you in a financial frenzy. It can become very difficult to handle the collection calls from various creditors. Bad debts can be very depressing and dampen your morale. When you have to deal with the pressing questions of making payment, it can become difficult to handle the stress. You may feel like ending it all to get out of this vicious trap. Many people fall into debt traps without realizing its repercussions. However, once you fall into this murky mess, few alternatives can help you overcome the situation. One such alternative is foreclosure. Although, it is not the best solution but it is one of the tried and tested solutions for getting rid of this financial problem. In this article, we shall discuss the foreclosure help guide.

What Is Foreclosure?

It is the process of terminating the rights of a homeowner covered by mortgage. If the homeowner or the borrower fails to make payments for the mortgage loan, the home is sold off by the lender and the money is adjusted against the outstanding loan amount. Once the foreclosure procedure is initiated, the homeowner loses all ...
... the rights to his property and is evicted from the premises. Inability to make payment on the mortgage may arise due to loss of job, poor health, medical challenges or death. Under such a situation, an individual may opt for this method to settle the debt. The lender will send a notice to the borrower, which is known as "notice of default". There are two commonly used foreclosure methods, judicial and power of sale. Different states in US will use different methods. This foreclosure help guide aims to compare the other alternative, i.e. bankruptcy, with this method.

Bankruptcy V/S Foreclosure

It is difficult to tell which method is better since both these methods will affect your credit score. They will reflect in your credit report for long time. Typically, bankruptcy will remain in your credit report for 10 years whereas foreclosure will remain for 7 years. If you want to save your house and can manage to re-pay the loan after a few months, you can ask the lender for forbearance. This means that the lender will suspend payments for few months until you are in a position to make payments. Another way of saving your house is by selling it off. Although, you will lose your house, yet it will not leave a black mark on your credit report. Moreover, you can buy a new house that is relatively smaller and save yourself from the wrath of a poor credit report. This method of selling your home is known as "short sale". Foreclosure help is available and there are ways of saving your home.

Foreclosure help guide will focus on different ways in which you can get out of this debt trap and live a peaceful life. Apart from the above-mentioned alternatives, there are some other options too. You can go for repayment plan, loan modification, partial claim, and deed in lieu of foreclosure.

If you are on the verge of receiving a loan foreclosure on your home or find yourself looking for short sale information, Foreclosure help guide can help you.