Falling behind on a mortgage moves faster than most other debt problems, and the options narrow as it goes. If you want to keep the house, the most useful thing you can do is act earlier than feels necessary.
Talk to the servicer first
Mortgage servicers have loss-mitigation options — forbearance, repayment plans, loan modification — and they generally prefer them to foreclosing, which is expensive for them. Ask specifically what programmes you qualify for and get it in writing.
Keep a record of every call: date, name, what was said. Servicer records are famously inconsistent, and yours may end up being the better ones.
Get free help, not paid help
HUD-approved housing counselling agencies provide free foreclosure counselling. They know the programmes, they deal with servicers routinely, and they do not charge.
Be extremely wary of anyone who charges an upfront fee to “save your home,” asks you to make mortgage payments to them, or wants you to sign over the deed. Foreclosure rescue scams target people at exactly this moment.
Where Chapter 13 comes in
This is the specific thing Chapter 13 does that Chapter 7 does not. It can stop a foreclosure and let you cure the arrears — the missed payments — over the life of the plan, while you keep making current payments going forward.
It is not a cure-all. It requires income sufficient to sustain the plan payment plus the ongoing mortgage. But for a household that has recovered from the thing that caused the problem and simply cannot produce a lump sum, it is often the tool that fits.
The harder question
Sometimes the honest answer is that the house is not affordable any more, and keeping it means several more years of the situation that got you here.
That is a brutal conversation, particularly if children are in that house. But leaving on your own timing — a sale, a deed in lieu, a planned move — is a materially different experience from being removed on someone else’s. A good attorney and a good housing counsellor will help you look at it clearly rather than talk you into either answer.
The one rule
Do not stop opening the post. Foreclosure runs on deadlines, and almost every option you have is easier the earlier you use it.