3 Steps to take if your home is foreclosed  

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3 Steps to take if your home is foreclosed  

With the economic fallout caused by the ongoing coronavirus pandemic resulting in many people losing their jobs, a lot of families now face the very real threat of having their homes foreclosed by creditors. Home foreclosure occurs when you fall behind in repayments on loans on which your house has been used as collateral, with creditors repossessing your house. However, if the worse comes to worst and you are faced with foreclosure, there are certain steps that can be taken to help you avoid losing your home. Here are three steps you can take if your home has been threatened with foreclosure. 

 Contact a lawyer 

Possibly the first step to take if your home has been threatened with foreclosure is to obtain legal advice. A specialist debt lawyer will be able to advise you on the process if a creditor wants to foreclose your home and what you can do to avoid losing it. If you are daunted by the prospect of expensive legal fees you can ill afford, don’t be; many law firms should offer you a free consultation during which your case will be reviewed by an attorney who will help you to formulate your next course of action.  

 Decide whether or not you want to keep your house 

Although home foreclosure sounds scary and often arouses many negative feelings, it could prove to be a blessing in disguise. You might have been living entirely beyond your means, for example, and actually your home is a huge expense that you struggle to maintain. A smaller house or rented property might prove to be more financially manageable and, therefore, lower stress. If you do decide to let go of your property, you could avoid foreclosure by finding a buyer whom the mortgage company are willing to take on. Doing this would satisfy your debt to the mortgage company and avoid foreclosure.  

 Start improving your financial situation 

Consulting a debt lawyer will help you through your foreclosure procedure, but what about long term financial planning? You need to work out how to improve your financial situation so that you can start to move forward and avoid problems like this in the future. You could go about assessing this one of two ways: by yourself or with a financial advisor. However, the former is a more financially friendly decision.  

 Start by assessing your current income. How much do you make a month, and what essentials do you need to pay for? How much does this leave you with? Remember, needs always come above wants. You need food, but you don’t necessarily need the coffee you buy on your way to work every morning. Critically analyze every aspect of your life, no matter how small, to see where you can make cuts. Doing so will ensure you are in a better financial situation moving forward and avoid a repetition of your descent into debt.  

If you do decide to seek out professional help, then financial advisors can be found at most banks, as well as in specific financial advisory firms, providing indispensable advice on all budgets.