Depending on where your rent to own home, you may just be able to make money even if you can’t make your repayments. By this, I mean if you are proactive enough and can see that you are not going to be able to make your repayments, you can try and negotiate to sell the property and make some money if your property has increased enough. I have found this to be the case in Sydney and in surrounding cities and it will be dependent on your contract.
The worst thing that you can do is just sit there in denial waiting for some big miracle or a big lotto. It is critical that you learn what is realistic financial. If you can see that you will be getting into trouble, do something proactively and start planning what you will do. If you sit there and get a default notice work out something before you get a termination notice. If you know that you it is will be long term then it is best if you discuss selling the property and taking some money with you.
The key is to be realistic and get out of the denial stage. Denying the problem and hoping that it will work out will get you kicked out and with a debt that will include solicitors fees as well.
If you acknowledge that you will lose the property than you can work it out to make some money. I’ve had one client where they were going to declare themselves bankrupt. This is a bad idea when you are rent to own as you could lose the right to own a property and to be able to refinance. However, we worked out a budget and gave them advice on how to deal with creditors. They have stuck to a realistic plan to get back on track and they are on their way.
Know when you are in too deep and ask for help. Being in denial could make you lose opportunities.
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