Once you are threatened with foreclosure, it is easy to go into shock mode and believe that there’s nothing you can do. However, this isn’t necessarily so. If you take advantage of the time you have left between your notice of foreclosure and it actually happening, you can stop foreclosure with debt consolidation.
Debt consolidation can take place with several different strategies. Getting a new loan that consolidates your debt is only one of these. Renegotiating your debts with a more affordable payment plan or getting a temporary stay on the principal part of the loan can also take place. Plus, you can attempt debt consolidation on your own or you can hire the services of a debt consolidation company to take care of things for you. It all depends on your ambition and determination. If you do hire the services of a company, they do all of the negotiating for you.
Heavy Debts Can Lead to Foreclosure
What is foreclosure and how do homeowners find themselves in the predicament of impending foreclosure? Foreclosure doesn’t happen overnight. It is the unfortunate result of months of amassing debt, failing to make payments on your mortgage (defaulting on your home loan) or other secured debts, and not doing anything to prevent it from happening. Typically more than one payment goes unpaid on a secured loan such as a mortgage, home equity, or other type of debt secured by the home.
Usually the homeowner knows that they are facing foreclosure simply because they know they haven’t been paying their bills. Foreclosure is a legal process by which the lender can seize the home of an individual who has failed to repay their debts. The homeowner loses all rights to the home and the lender gains these rights. The homeowner must move out and loses all equity in the home. The lender has the right to sell the home and take the money to repay the debt.
Stopping Foreclosure through Debt Consolidation
Once you are notified that a lender intends to use foreclosure proceedings against you in order to recoup your debt, it is time to take action. Don’t wait. Don’t hesitate for even a day as this might lull you into not taking action. Your best bet is to contact a debt consolidation company or a lawyer to begin debt consolidation immediately.
Foreclosure is usually a method of last resort. Lenders would much prefer to get repayment without going through the hassle of a foreclosure. Debt consolidation companies will attempt to negotiate with the lender some type of loan forbearance or restructuring of your loan payments. Once this takes place, the lender will stop foreclosure proceedings as long as the homeowner makes good on his promise to repay his debts.