A foreclosure is a legal process pursued judicially or extra judicially by a lender/mortgagor or a lien holder in order to collect the amount of arrears or apply the property that served as collateral as payment of the debt owed. The occurrence of foreclosure in Canada is not as bad as in the United States or some other country, but it has significantly increased. This is the reason why it is important to discuss the different alternatives to foreclosure.

Canada Foreclosures: Loan Modification

Loan modification is one of the simplest alternatives in preventing foreclosure. This is especially true if the borrower/mortgagor actually has financial capacity to pay the amortization but has fallen under hard times or experienced a genuine hardship. However, a very important point to remember is that a loan modification should be one that accomplishes one, some or all of the following:

1. Lower the interest rate

2. Shorten the payment period

3. Change the amortization schedule

4. Change the type of loan

5. Provide for substantial change on the loan terms

Tip, when changing loan types it is always best to end up with a fixed rate mortgage that is paid through regular amortizations without balloon payments. Any modification that does otherwise is not very good.

Canada Foreclosures: Refinance

A refinance is an arrangement whereby one of the lenders substitutes the existing mortgage arrangement with another. It is not important whether or not there is a change of lender, what is important is that there is a substantial change in loan terms. Tip, be very wary of the refinance terms that seem to be in your favor but is really not. For example, if the lender offers a refinance that changes the interest rate from fixed to adjustable. This arrangement will most certainly result in an initial and substantial decrease in amortization payments. However this usually lasts for only a few years at most. After that the amortization payment may end up increasing regularly and substantially.

Canada Foreclosures: Bankruptcy Chapter 7 or13

Filing for Bankruptcy is a viable alternative for a consumer who finds himself/herself unable to pay outstanding debts as well as regular amortizations. Both chapters have their advantages and disadvantages. The most significant of which is the fact that in a Chapter 7 bankruptcy all debts are wiped out but all properties not exempt and declared as such are surrendered whereas in Chapter 13 the debt is subjected to a payment plan and properties are not usually surrendered or lost.

It is worth noting that there has been a significant increase of individuals and companies that claim to be bankruptcy experts. These entities offer their services to the public for a fee. Please understand that filing for bankruptcy can be done with or without the assistance of another or a lawyer for that matter. However bankruptcy, especially Chapter 13 is very confusing and entails substantial negotiations with creditors as well as application of relevant laws and jurisprudence. Not to mention the fact that if a creditor objects, it is usually done through an attorney. Therefore it would be best to either just do it yourself through the assistance of credit counselors or hire an attorney.

Are you looking for more information on Canada Foreclosures? If you are, visit http://www.foreclosures-gov.ca/ now!

Are you looking for more information on Canada Foreclosures? If you are, visit http://www.foreclosures-gov.ca/ now!

Author Bio: Are you looking for more information on Canada Foreclosures? If you are, visit http://www.foreclosures-gov.ca/ now!

Category: Real Estate
Keywords: loan modification,loan terms,canada foreclosures,loan modification loan