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Resources on Foreclosure, Credit & Debt, and Bankruptcy

How to File for Chapter 7 Bankruptcy

Chapter 13 Bankruptcy

The New Bankruptcy: Will It Work for You?

Selling Your House in a Tough Market

Foreclosure: Articles and FAQs

Guide to Avoiding Foreclosure (HUD)

Avoiding Foreclosure: State Resources (HUD)

Foreclosure Survival Guide

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Foreclosure Survival Guide (1st Edition)

You Have at Least Some Equity in Your House

If you have equity in your house, and are facing foreclosure because of missed payments or a rapid increase in your mortgage interest rate, it makes sense to hold on to the house if for no other reason than to protect your equity. Needless to say, the more equity you have, the stronger this reasoning.

When Equity Doesn’t Help You Pay the Mortgage

It’s not uncommon for people with fixed or limited incomes (disability, retirement, or low-paying jobs) to own homes with affordable mortgage payments and with substantial equity ($50,000 or more). But they can’t borrow against this equity because their income level won’t support repayment of the loan, so the only way to benefit from the equity is to sell the house. However, because they would still need affordable shelter, selling may not be an option, especially in this market.

Even people with higher incomes may not be able to borrow against their equity, either because credit has dried up, they have bad credit, or because other debts and their lifestyle won’t support repayment of a new loan.