The foreclosure rate might be epidemic, but there are a number of ways to avoid foreclosure and keep your property secured. The growing problem of bank repossessions has hit record levels and there seems to be no end in sight. Adjustable loans have caused a major brunt of the housing chaos, but there are some tried and true defense mechanisms set in place to prevent foreclosure in every state.

To avoid foreclosure and protect your good credit, the best option might be to walk away from the burdensome loan by putting your house on the short sale market. The short sale will move your property quickly, even in a sluggish economy, and allow you to walk away with little to no outstanding debt. However, to be effective, the short sale selling price must be well below market value, even if you have to pay a few thousand out of pocket to seal the deal. In most cases, you will be able to finance the difference between selling price and what you must pay to cover your original loan, but most banks will work with you with a payment plan until the balance is reduced to zero. If you are feeling the financial pinch and fear you will fall behind on the mortgage payments, avoid foreclosure with a short sale, keep your credit clean and buy a less expensive house.

The distressed borrower with excellent credit may wish to get a foreclosure refinance to bring down the interest rate and lower the monthly payments. No one knows how long a good refinancing climate will last, so if this is your first choice to get some breathing room, do not delay with the proceedings. As with most programs to prevent foreclosure, there is little time to mull your ideas and plan of attack. Be decisive and act quickly to get ahead of the creditors and avoid foreclosure before its too late.

Filing a chapter 7 bankruptcy is yet another option to prevent foreclosure, and this procedure should be handled by a qualified attorney with plenty of staff and experience to avoid foreclosure before your property hits the courthouse steps. An expert attorney may provide successful services when in an emergency situation, but for best results and peace of mind, be sure to start your chapter 7 paperwork as soon as possible. And although a chapter 7 is a strong mechanism to stop foreclosures, the down side is that the BK will remain on your credit report for 10 years. So if you need to keep your credit clean, the chapter 7 motion may be counter productive to your financial status in the long run.

Learn your options on how to stop foreclosure. Educate yourself, it’s your best defense.

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