Homeowners consider crowdfunding in fights to avoid foreclosure

Experienced bankruptcy attorneys are often able to help homeowners avoid foreclosure through utilization of a variety of legal options. However, even with the help of an experienced attorney, struggling homeowners are often compelled to think creatively when trying to save their homes. While negotiating a loan modification, contemplating bankruptcy or simply sorting out their legal options, homeowners are increasingly taking advantage of tools like crowdfunding to make ends meet while navigating their legal situation.

Crowdfunding essentially occurs when a variety of individuals pool their financial resources in support of a cause. In general, crowdfunding is done over the Internet. It is a tool regularly used by non-profit organizations, political campaigns and school groups in order to raise funds from supporters. Increasingly, it is being used by individuals and families to raise money from loved ones and strangers to pay medical bills, finance creative work and even save homes from foreclosure.

Crowdfunding does not ordinarily allow homeowners enough funds to pay off their mortgages or even necessarily to make a sizeable dent in them. However, it can help homeowners pool enough funds to survive until a loan modification is finalized or other legal option is successfully completed. Not all crowdfunding efforts are this successful, but homeowners who have generous loved ones or tenacious online campaigns have been known to raise enough to make a difference in their lives.

Ultimately, if you are facing foreclosure, you are advised to seek the counsel of an experienced bankruptcy attorney in order to help you navigate your complex situation. However, thinking creatively can also likely help you regain your financial footing.

Source: CBS Moneywatch, "Homeowners fight foreclosure through crowdfunding," Ilyce Glink, July 30, 2013

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