What should you do if you are facing foreclosure?

Getting the notice from the bank that your house will be foreclosed can leave you in a state of panic. This is not just a house, but your family’s home – how can the bank take it away from you?

The stress of struggling with debt and pending foreclosure actions can be all-consuming, but you must try not to panic. You have options to prevent foreclosure.

So, what should you do?

1. Understand the law

Facing foreclosure can be scary but try and approach the situation with a clear and calm mind. This can help you make informed and rational decisions to save your home.

Under New Mexico law, lenders must:

• Give you plenty of notice about the foreclosure;
• Provide proof that the homeowner owes money, or has defaulted; and
• Inform you of the options you have to remedy the situation.

Take the time to understand your rights under the law, read the notice and understand all of the information about the foreclosure before taking any action.

2. Try to modify your loan

It can also be helpful to speak with your lender directly. This might seem intimidating, but you may have the option to adjust your mortgage to better meet your abilities.

Forbes, you might be able to:

• Refinance your loan with new terms;
• Negotiate a repayment plan that is easier to manage;
• Get a forbearance to halt payments for a short period; and
• Modify the loan, such as the amount or the interest rate.

When you apply to adjust your loan, most banks cannot continue with foreclosure. This gives you a chance to negotiate a better option for you and delay or stop foreclosure completely.

3. Consider filing bankruptcy

If the lender refuses to modify your loan, or you are struggling under the weight of too much debt, you might also consider filing bankruptcy. For example, when you file Chapter 13 bankruptcy:

• The automatic stay can stop pending foreclosure actions;
• You are often able to list your home as exempt property to protect it; and
• Your repayment plan can help you repay mortgage debt, as well as several other debts.

You can speak with an attorney to better understand how bankruptcy can help you stop foreclosure, as well as the other options available to you.