Can you stop foreclosure after a notice of default?

On Behalf of | Mar 11, 2023 | Bankruptcy |

Encountering financial problems that lead to a missed mortgage payment is not an uncommon experience for Tennessee homeowners and others throughout the United States. In fact, many people get in over their heads and find themselves missing two or three payments in a row. When that happens, it can trigger pre-foreclosure, a process that precedes foreclosure.

A lender who is owed three or more months on a mortgage may send a notice of default to the mortgagor. One of the biggest mistakes homeowners can make is to disregard this notice. Instead, it is best to immediately contact the lender to discuss possible options for restructuring the payment plan so that foreclosure does not occur.

Lenders do not want to initiate foreclosure

The typical lender would rather avoid foreclosure almost as much as a homeowner might. Many lenders are willing to agree to alternatives, such as extending the life of a loan or temporarily lowering monthly payments. There are also options that a homeowner might employ to halt the foreclosure process, such as filing for bankruptcy. Bankruptcy filings create an automatic stay against foreclosures, collections and litigation intended to collect compensation for damages.

Getting things back on track to avoid losing a home

If a notice of default arrives in the mail, it lets a Tennessee homeowner know that a mortgage lender is considering filing for foreclosure. It is helpful to seek guidance and support from an experienced bankruptcy attorney, who can recommend the best course of action. Often, filing for bankruptcy not only provides relief from debt but can also help lay the groundwork to restore financial stability down the line.


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