Six Steps to Keep Your House
Dan Fugal | November 21, 2009We live in a difficult world, and the financial world may be the most difficult place of all. Even in good times, it can often be hard to make ends meet. So when trouble strikes, it can be tough to know what to do, but whether your income troubles are due to accident, student loan, unexpected medical bills, or unemployment, you have options to prevent you from losing your house. These are your first steps.
1. Look carefully at the cause of your debts. What is really causing your inability to pay your debts? There may be something you can do about that, perhaps take a second job or apply for assistance. Especially in the case of student loans there are many different avenues to acquire government or other assistance. You should also take a look at your spending habits, and make sure there is nothing to fix there.
2. Talk to your creditor. The person in the world to whom your house is the most valuable is you. Your bank doesn’t want your house, they want as much of your money as possible, so they’re often willing to help you with a debt payment plan if you’re upfront about your problems.
3. Pay your overdue bills. You want to relieve yourself of your highest interest first. You should also pay down credit card debts if you can. This will serve a few purposes: it saves you money on your high interest bills; it gives you the confidence to know that you can take care of your debts; it lets your lender know that you are capable of and willing to pay down your debts.
4. Know your rights and your options. If you’re in debt, you have many rights that you may not know about. There is a statue of limitations on debts in many states, and you have protection from creditors unduly harassing you. Check out the FTC’s website for more information, and make sure to read the Fair Debt Collection Act.
5. Contact a debt counselor. A debt counselor is somebody who can give you lots of information, and help you set up a payment plan. Many states offer a free debt counseling service to help protect residents. Make sure your debt counselor isn’t trying to sell you anything; this is a key that he doesn’t have your best interests in mind.
6. Beware of foreclosure scams. They are everywhere, and they are looking for anybody willing to fall for their scheme, particularly people who feel panicked. By all means, do not transfer your property into anybody else’s name. Once they have your signature, you’ve lost your house. Don’t fall for it.
Good luck, and remember, no matter how things end up, you can always start with a clean slate in a few years.
Are you in financial trouble and looking for the best advice? We’re here to provide free, high-quality information to you. Don’t make any deals with your lenders until you’ve educated yourself. We will show you how to find the best debt management strategy for you.
