During a foreclosure, a lender takes back control over a property. The homeowner is evicted, and the home is then sold.
A foreclosure usually occurs because a homeowner has fallen behind on payments. Defaulting on a loan or mortgage payments starts the process. The lender will reach out to the homeowner to let them know that they’ve missed the payment. Then, if the payments are still behind over the course of three to six months, the lender can start the process for foreclosure.
In Florida, your lender will need to go through the court to get permission to place your home into foreclosure. The court will then decide if the foreclosure should or should not be approved. If it is, the home is placed into a sheriff’s auction and sold to the highest bidder. If it is not approved, then the lender will need to continue working with the homeowner, at least in the short-term.
What should you do if you’re facing foreclosure?
If your home may be placed into foreclosure, one way to stop that is to go into bankruptcy. With Chapter 13 or 7 bankruptcy, you may be able to halt the foreclosure process and get your finances arranged in a way that allows you to make those mortgage payments on time.
Chapter 7 bankruptcy is beneficial if you have little or no income. On the other hand, Chapter 13, a wage-earner’s plan, allows you to keep all of your assets as you begin to make consolidated payments. Our website has more information on these options and what you can do if you’re facing foreclosure.