Sometimes a business may not be able to meet up with its loan obligation even after the expiration of the terms. When this happen, a creditor may initiate a legal proceeding in order to take possession of the collateral or resell the collateral to pay up what the business owes. This is what is known as foreclosure. You can always stop foreclosure if you know how to go about it. For the fact that a creditor files a foreclosure lawsuit against your business does not mean that the creditor will win the case. Here are some of the tips that you should apply in order to stop foreclosure against your business.
Work thing out with your lender
When you analyze your financial condition and you discover that you will not be able to make payment for a month or months, it is advisable that you meet with your lender in order to work things out with him. Indeed, it is the advantage of the lender not to foreclose because foreclosure can be very expensive. It is also time consuming. This is why some lenders do not like to foreclosure. So, when you explain your financial condition to your lender, a better solution that will be in favor of both parties will be arrived at.
Modify the terms of the loan
When working out things out with your lender, you should try to modify the terms of the loan the way it will suit you. There is the tendency for some people to think that their lenders will not agree to modify the terms of the loans. This is far from the truth. The lender will always be willing to accept a new term that will enable you to pay something to them. It is always better for them to get some percent of what is owed rather than not getting at all.
Seek for forbearance
Forbearance implies a delay in enforcing rights. In this case, it is a delay in enforcing the foreclosure rights. This will allow you to make some partial payments for a stipulated period as both parties agreed upon. However, at the end, the amount forbore will be paid by you.
Hire a counselor
It is advisable that you hire a housing counselor. Hiring the services of a housing counselor will be of use to your business. As a professional, the counselor will help to work out things between you and the lender. He will also help to bring your finance back on track. You have to be careful when hiring a housing counselor. Do not hire any person based on sentiments or on friendship. It will be to the advantages of your business if you hire a counselor based on experience and professionalism.
File a written answer to the complaint of foreclosure
If after taking the above steps and the lender is bent on filing for foreclosure, it is advisable that you file an answer to the foreclosure complaints and attend the hearing. If you do this, no default judgment against you will be issued.
The above are some of the ways through which you can stop foreclosure.