When a house goes into foreclosure, the bank begins a process of repossession of the property on which it has a lien. Typically, foreclosure proceedings begin after one or two late payments and can take up to a year or more to complete. While the foreclosure process is ongoing, the homeowner has a variety of options.

Can I sell my house during a foreclosure?

Yes, you can still sell your property during foreclosure as you still have a legal claim to the property and any equity you have built on it. Many times, homeowners will attempt to negotiate a short sale with the lender. Short sales allow the property owner to sell the house for whatever he can get for it. The bank generally forgives any outstanding balance or can only claim a portion of the balance under state law.

You may be able to get a stay of foreclosure

While selling the property is an option, it may be possible to prevent your lender from moving forward with foreclosure proceedings. This can be done by filing a Chapter 7 or Chapter 13 bankruptcy. During the time of the stay, it may be possible to work out an alternative payment plan. If you file for Chapter 13 bankruptcy, your debt will be reorganized and the stay will be in effect as long as all payments are made according to the bankruptcy plan.

Know your rights under the law

You may want to consult with an attorney before taking any action to sell the home during foreclosure. Ideally, you’ll work out a payment plan with your lender, sell it short, or sell it outright. Before you short sale or sell it outright, make sure there are no clauses in your mortgage that prevent you from paying upfront or prohibit you from making a deal. With the help of an attorney, it is possible to delay a foreclosure without filing bankruptcy while still allowing the borrower to sell their home.

Can I sell my house? That’s probably the biggest question on your mind when you first hear that you’re going to be foreclosed on. Fortunately, the answer is yes and there may be no penalties for doing so. So don’t be afraid to put your house on the market instead of leaving your fate in the hands of a bank.