888-995-HOPE (4673)

This is not the kind of thing you will usually see in this blog. My presupposition is that through good decisions, hard work, and persistence you can change your life. But sometimes things happen. Hard working, clean living, perfectly wonderful people lose their jobs or can no longer work due to accident, illness or situations totally beyond their control. Then what?

If this sort of misfortune befalls your family, take action quickly. List your monthly expenses, especially your monthly payments. Ditch anything that is not absolutely necessary, like cable TV. Contact your creditors, especially the bank that holds your mortgage. Negotiate new terms on your own if you can. Be sure and document every call thoroughly and completely. Always ask for a written confirmation of your phone conversation with these representatives. I always prefer face to face over phone if that is possible.

The key here is survival. Protect what Dave Ramsey calls the four walls, your house, your utilities, food and clothing for your family, and a car. Notice I said a car not the car. It might be time to trade those monthly payments for a paid for clunker.

If you can’t reach a mutually acceptable resolution with your bank to keep your home, there are options other than foreclosure, including a short sale. Short sales are not a perfect solution. There are also Government programs that are designed to help you hold on to your house. Start with Making Home Affordable.Gov. 888-995-HOPE (4673)

Making Home Affordable

This website contains good information on a wide variety of available programs and how to begin your journey on what will be a time consuming and complicated process.

They also provide some general educational material including this list of common scams.

1. Beware of anyone who asks you to pay a fee in exchange for counseling services or the modification of a delinquent loan.
2. Beware of people who pressure you to sign papers immediately or who try to convince you that they can "save" your home if you sign or transfer over the deed to your house.
3. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
4. Never make a mortgage payment to anyone other than your mortgage company without their approval.

Look for qualified guidance sooner rather than later. The National Foundation for Credit Counseling provides certification for nonprofit credit and mortgage counselors. This service isn’t free but their charges are considered nominal. It is a good place to start if you find yourself in financial trouble.

The National Foundation for Credit Counseling

If serious financial problems overtake you find properly qualified professional help so that you can take action as soon as possible. Do not wait. And please, don’t try to live on your credit cards. No one ever got out of a hole by digging a deeper hole.