If you are in a position where you can no longer make any payments on your mortgage, you are likely going to be dealing with the foreclosure of your home. Finding out that your home must be foreclosed on can be a difficult truth to deal with on your own. You may also be dealing with severe stress, isolation, panic, and confusion over legal matters. It’s important to understand what your options are with the help of an Azle foreclosure lawyer who can assist you.
Foreclosure is a legal process in which a mortgage lender or lienholder is allowed to sell a property to satisfy the debt that the property owner has managed to accrue. A law firm with experience in foreclosures could be what you need to turn the direction of your case in your favor. An experienced foreclosure lawyer can help you work out a plan to prevent your foreclosure or direct you toward other viable options.
There are two primary forms of foreclosure in the state of Texas. A third form called judicial foreclosure is rare in Texas and unlikely to happen to you. Depending on how much debt you owe and how your lienholder went about the process, either of these two forms could happen to you:
- Non-Judicial Foreclosure: If you are dealing with a non-judicial foreclosure, the lienholder who owns your mortgage is allowed to sell your home without having to file a civil claim against the homeowner. This is also sometimes known as a “power of sale” foreclosure, as the holder must have a deed of trust with a clause that gives them total authority to sell the property without your consent.
- Expedited Foreclosure: A foreclosure can be expedited if the lienholder applies for it. It allows the foreclosure to move in a similar fashion to a non-judicial foreclosure. When the foreclosure involves elements like home equity loans or reverse mortgages, it may be necessary for the holder to use an expedited judicial foreclosure, sometimes called a “quasi-judicial foreclosure.”
Dealing with an abrupt foreclosure can cause severe and irreparable damage to your finances, as well as other aspects of your life. You may be totally unprepared to deal with the sort of financial ruin a foreclosure can trigger. It is crucial that you speak with an experienced foreclosure lawyer to anticipate your next steps. Once you learn that foreclosure is inevitable, a lawyer can inform you about your options. Here is how foreclosure can affect your life:
- Your Credit Score: A foreclosure can destroy your credit score and cause it to drop by nearly 300 points in some situations. Losing a property due to foreclosure sabotages your credit for quite some time. Raising your credit score again may take many years of reliable payments on secured and unsecured debts alike. Credit cards, car loans, and more are going to help.
- Purchasing a Home: It is going to be very difficult for you to purchase a home if you have a foreclosure on your financial record. Some mortgage lenders may require you to wait years before your application is even considered. If the foreclosure was totally out of your control, and you are able to explain your position, you may be able to avoid certain difficulties, but it will not be an easy process.
- Tax Situations: When your home is foreclosed, you may have to deal with additional trouble from the Internal Revenue Service (IRS). The IRS considers borrowed money that has been left unpaid to be taxable income. If your home is foreclosed and the holder is unable to recoup their investment in full, you will likely be required to pay taxes on what’s left, as the IRS considers it taxable income. A foreclosure lawyer can help you figure this out.
- Employment Possibilities: It is an unfortunate fact of life that a foreclosure can even affect your employment opportunities. Some companies may initiate a credit check as part of a comprehensive background check for prospective employees. They may consider a foreclosure to be indicative of poor money management or bad judgment, and that could be enough for them to stop considering you for the job.
- Trouble at Home: The emotional toll that a foreclosure can take on you and your family can be significant. Sometimes, losing a house can be like losing a loved one, especially if it is taken away from you without your approval. The stress and instability of foreclosure can cause rifts among your family unit.
Sometimes, the only option to avoid foreclosure is to file for Chapter 7 bankruptcy. However, filing for bankruptcy may not be an option for some families. Here are some of the possible alternatives to bankruptcy that could be a better fit for you and your family:
- Let It Go: Sometimes, the option that makes the most sense is to stop fighting the foreclosure and just let it go through, especially if you don’t want to keep the house. This can be the easiest option for everyone. However, it is likely going to have a severe negative impact on your finances and other aspects of your life.
- Forbearance: Many homeowners have applied for forbearance agreements following the COVID-19 pandemic, which may provide them with some temporary help and grace as they get their finances back on track. A forbearance is a temporary suspension of your mortgage payments. Having your financial obligations halted but not permanently stopped can be a good way to get yourself back into a financially stable position.
Dealing with a foreclosure in Azle can be a frustrating and overwhelming situation. Having someone in your corner who understands what’s at stake for you can make all the difference. Reaching out to a foreclosure lawyer could be the decision that helps you the most. The legal team at Steele Law Firm, PLLC, understands the kind of legal help you need when dealing with a foreclosure. Contact us to speak with a valued team member about your case.
