Keep Your Home - Avoid Foreclosure

Since life is a variable event , unforeseen occurrences have caught many folks off guard. The end result is: home foreclosure, unpaid credit card balances and even bankruptcy. However, it is definitely possible to repair your credit history. The main thing is to remember to keep in communication with your creditors, explaining your situation.

Once you think that you are ready to negotiate directly with your creditors, pretend you are Monte Hall and ask, "are you ready to make a deal?" You will be pleasantly surprised that most creditors will accept a 30 or 40% settlement on the outstanding balances.

However, if there has been an attorney assigned to the matter, it gets a little more difficult to reach a settlement, but they will accept partial payments until it is satisfied. Make sure to get whatever was agreed upon in writing. It doesn’t seem possible, but you will eventually pay-off your creditors.

Secondly, once you receive the signed settlement letters, forward a copy to the credit bureaus: Equifax, Trans Union and Experian/TRW. Each bureau will reflect that it was paid in full.

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Should I use the services of a “consumer counseling finance company?

Absolutely not! The concept is very much like a bankruptcy. They will negotiate with your creditors to lower your payments, but this will not serve you well when you go to apply for a loan.

To rebuild your credit, you might consider a secured credit card. Usually your bank can provide an account where you have made a deposit upon which you draw from it via credit card, thus you are on the way toward credit recovery.

These are necessary efforts if you want to obtain mainstream financing.

Use your equity for faster recovery.

If you have enough equity in your home, why not refinance and pay-off your creditors. You can accomplish your goals with a sub prime loan . Of course, the interest rate is not the most competitive. However you can refinance 24 months later to obtain mainstream financing. The trick is not to be late on any of your payments during that interim, and do not create any other negative issues on your credit report.