The threat of facing a foreclosure is a not a trivial thing. It can lead to anxiety or depression. The thought of losing your precious home can be frustrating and embarrassing especially if it’s your biggest investment.
A foreclosed home attracts more buyers who want to invest in cheaper, but good properties, and grab a superior investment opportunity. Seeing your home in public auctions is the worst thing that can happen to any homeowner.
Overcoming a foreclosure is difficult and the truth is you are actually caught in a situation faced by many homeowners. In fact, foreclosure rates have significantly increased during the past few years. Homeowners are beoming overwhelmed with the process and worried about their situation that they find it really tough to pull themselves out of all the financial anxieties.
Fortunately, there are a few companies offering stop foreclosure assistance—things you need to learn to save your home. But make sure you opt for legitimate services so you won’t get hooked on scams. Doing thorough research online can help you find legitimate services. Aside from getting information and solutions from a reputable organization, you can also consider some efficient tips or tricks on how to stop foreclosure and secure your home.
One of these tips is to learn about the things you should NOT do if you want to prevent the foreclosure procedure.
In reality, lenders are more willing to give you a list of options that can help you save your property as opposed to you having to sell your home in a public sale or spending thousands on a complicated foreclosure process. They are even more interested to know what caused your failure to pay your credit and if you can still remedy the situation.
So, don’t ignore their calls because they won’t just go away by you not doing anything. Don’t file a bankruptcy right away if you haven’t yet talked with your lawyer or tried other options. Don’t be in too much of a hurry to settle everything with loan modification if you can’t assure you can afford the interest rate. While getting modified loans is another way to protect your home, you should be aware that some companies want to benefit from this option so they occasionally adjust the interest rates.
Don’t spend on things you don’t really need. Instead, make plans to boost your income. These days there are lot of easy tips that can help you earn money even if you’re at home.
To summarize, talk to your lender, DON’T ignore the past due payments. You may be surprised how willing they are to work with you.
Consumer bankruptcy filings ticked up in February, but so far the rise has slowed from 2010.
The number of personal bankruptcy filings rose 11% to 102,686 in February compared to a month earlier, the American Bankruptcy Institute and the National Bankruptcy Research Center reported recently.
“Though consumers are striving to reduce their debt burden, high unemployment and a still-poor housing sector continue to fuel new bankruptcies,” Samuel J. Gerdano, the American Bankruptcy Institute’s executive director.
Compared to the same time a year ago, however, personal bankruptcies fell 8%. While it’s still early, data for the first couple months of the year could indicate that consumers won’t have a repeat performance of the surge in filings in 2010. More than 1.6 million consumer bankruptcy filings were reported last year — the highest level in five years.
A more tempered pace of filings is partly from consumers saving more and paying down their debts. It’s also because less credit has been available, which makes it harder for Americans to incur new debts.
MSN Money columnist Liz Pulliam Weston recently wrote an interesting column about the high failure rate in the credit counseling business. It turns out that most people who sign up for credit card counseling, even if they’re working with a legitimate counselor licensed by the National Foundation for Credit Counseling, fail to pay down their debt.
This often leaves these people with one choice: They have to file for bankruptcy protection.
Pulliam Weston cited statistics from the National Foundation for Credit Counseling in her column. According to these numbers, of the 3.2 million people who contacted the foundation for help in 2008, one-third were able to handle their financial problems on their own after a counseling session. Another third had too much debt for credit counseling to matter or were referred to social service agencies to deal with more important issues such as gambling or alcohol addiction.
The final third did enroll in debt-management programs, but at least 45 percent of these people dropped out of their programs before paying down their debt.
Pulliam Weston emphasizes that she doesn’t bring up these numbers to dissuade struggling consumers from taking sessions at a legitimate credit counseling center. The professionals working in such places can help consumers identify the reasons why they overspend. They can then help them change their negative spending habits, preventing them from running up their debt again in the future.
However, the column does serve as a reminder to consumers that eliminating debt is far from easy. It takes real commitment and it takes will power. It makes little sense for consumers to eliminate their debt if they’re just going to run it up again in the next several months.
Unfortunately, with many consumers, that’s exactly what happens.
Those consumers who have a long history of overspending can receive real help from credit counseling. They have to make sure, though, that they’re going into their counseling sessions with the right attitude. They have to be willing to make substantive changes in their spending habits. They have to be willing to delve deep enough to uncover what causes them to spend money that they don’t have.
This is far from an easy process. Most U.S. consumers don’t feel comfortable talking about money or debt, and they especially don’t feel comfortable talking about their own overspending problems.
However, a debt-repayment program isn’t going to do struggling consumers much good if it doesn’t include some real credit counseling. Consumers need to learn how to use money and credit wisely before they can ever hope to get their finances in order.