Sometimes the only way to stop a home foreclosure is by filing a Chapter 13 bankruptcy.  You are now allowed to take up to 5 years to repay arrearages in a Chapter 13 bankruptcy.  Additionally under the 2010 government hamp program you may have to be in foreclosure or bankruptcy to qualify for a loan modification.   In Kentucky, a Chapter 7 Bankruptcy will only temporarily stop home foreclosures.  But you may want to file an answer and a Chapter 7 which may allow you to stay in the house for a year or more before the foreclosure is final and you have to move.   Just by eliminating unsecured debt in a Chapter 7 bankruptcy you may afford your home and avoid foreclosure.   Sometimes you may want to include other home foreclosure options with your bankruptcy. 

LOAN MODIFICATION - Some mortgage lenders will negotiate the interest rate or principle or home foreclosure fees being added to the back of the loan. Home foreclosures can be prevented.  Drawback: your loan may still be a bad loan or a home may still be unaffordable.  See us for other alternatives and look at the hamp program.   

FORBEARANCE PROGRAMS - Some home lenders offer home foreclosure workout programs.  You immediately pay an amount normally including foreclosure fees, the balance is added over a period of 6 to 24 or 48 months.  Drawback: How to afford it. 

SHORT SALES This is an example of a paying to a lender less than what is owed for a property.   Often a relative or friend buys the property as a straw man and sells it to you.  As an example      Loan $250,000 -- Lender estimate of home value $185,000--  Expected proceeds of foreclosure sale 150,000 --  Expected expenses of foreclosure 10,000  Offer $145,000 house sold back to Debtor! Drawback:  Beware of others that make this offer to "help" you after a bankruptcy or foreclosure is filed.  It may be an attempt to steal your home.  Also there may be tax consequences for forgiveness of debt if you do not file a bankruptcy and do the short sale.  Mortgage companies will 1099 you for the loss as income and then you owe a massive tax debt. 

Chapter 13 Bankruptcy - Only a Chapter 13 will permanently stop a foreclosure.  You can take up to 2 years to cure your arrearage.   Filing an answer to a foreclosure will delay it 6 months to a year and a Chapter 7 will delay it for 6 months to a year.  Tax consequences if filed at the right time = none. 

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