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How To Get Out Of Debt And Save Your Home

Generally, people start off in their homes with bills that they can manage but there comes a point for many people where things get out of hand. Sometimes it is because of over spending, medical bills, loss of employment, or a combination of various things. The thing is, whether it was your fault or not, it is up to you to take action and get yourself out of the situation that has been created. There is just one thing worse then being in a lot of debt and that is losing your home because of it.

What Is Debt?

Debt is anything that is owed to another person or a company. Common debts include credit cards, unsecured personal loans, car loans, and mortgages. While it is not that easy to quickly pay off the mortgage, all of the other debt should be easy enough to handle when it is approached quickly enough and in an efficient manner.

Of course, debt is something that seems to keep reappearing no matter how hard you try to get rid of it. And this is nothing to worry about. There will always be things that are going to come up as this is life and you can expect the worst when it comes to unexpected expenses. The goal though is to make sure that you are always paying off your current debt and any new debt as quickly as possible so that it does not turn into a snowball effect.

One way to make sure that you are not going to get too far in over your head is to cut up the credit cards, cancel the accounts, and throw away all offers for new credit cards that come through the mail. Only take out additional credit when it is a true emergency and you have no other options.

How To Improve Your Situation

If you find that you are over extended, or very close to becoming over extended, you will need to begin looking at all of your other options before it is too late. The last thing you want to do is to watch your home go to someone else through a foreclosure sale because you could no longer afford the payments on it.

The first thing to do is to prioritize your bills. The most important expense you have, besides putting food on the table for your children to eat is your mortgage payment. After all, without the house there would be no need for the electric bill or the cable connection. Credit cards are unsecured debts so those should be the last of your worries.

Make sure that your mortgage payment is getting paid and then start paying off the other bills as quickly as possible. The best way to do this is to simply pay additional on top of the bare minimum that you are used to sending each month. If this is not able to be accomplished then you will want to look into financial assistance programs that can help you budget, reorganize, or reduce the amount of your debt.

What About When It's Too Late?

If you were scared or simply in denial about the amount of trouble you were in with debt, then you may already be looking at the foreclosure of your home. There may be a way to save the home if the auction has not already taken place. If you can come up with the money, through borrowing from friends and family, and you can bring the account current then you may be able to save the home. You have to realize though that this will most likely include attorney fees. The amount of the attorney fees will depend on the length of time that the home was in the foreclosure process.

If the auction date has already come and gone, you need to see if your state has a redemption period. This is an amount of time after the auction date that you have to pay off the loan. Maybe you can refinance or maybe you can suddenly come into a lot of money. If you are not able to come up with the money to save your home then all you are left to do is to learn your lesson and move on. You still have a long life to live and there are still other homes that you can make into something of your own.

Moving On

Find a place to rent or you can try to buy another home. Either way, you need to make sure that you are eliminating all of the debt that got you into this situation in the first place. If you need to, there are classes out there for managing finances that you could look into. Just make sure that you are setting yourself up to where you and your family will never have to face this situation again.

In closing, it is important to realize when you are in over your head. Debt is not a good thing and credit card collecting is not a hobby that anyone should pick up. Start getting help as soon as you notice trouble, as that is the best way to make sure that you are stopping problems before they even occur. At least you will be able to see the errors of your ways and you will be able to do better with the next home that you own.