Although you want to avoid a bandruptcy, it is even better to avoud foreclosure. Foreclosure is the legal process whereby property is repossessed and sold at auction to cover the costs of an unpaid debt. Foreclosure is usually resulting in the homeowner defaulting on mortgage payments.
Over the last year you have heard about the rising rates of home foreclosure. The foreclosure rate in the US is expected to rise this next year as well due to the mortgage meltdown.
There are many ways to avoid foreclosure. One way to avoid the foreclosure process is to work with your lender as soon as you get behind. The longer you wait the less your lender will be willing to work out a repayment plan for you.
Most lenders have "work-out" programs available that they can offer to help you catch up with your mortgage. A few examples of these foreclosure "work-out" plans are as follows: a temporary payment deferment period, a temporary forbearance period, temporary payment or rate reduction, and/or a loan modification. These work out options can all help homeowners to avoid foreclosure, so contact your lender quickly before you get too far behind and none of these options are applicable anymore. Foreclosure and bankruptcy are both bad for your credit and for future financing, but you definitely want to try and avoid foreclosure if possible.