Bankruptcy can be a long and stressful process there are many options and alternatives to filing bankruptcy. Deciding to file bankruptcy can be a tough decision, this section will help you see that filing bankruptcy is not the only solution you have.

Bankruptcy is not always the answer, and the effects can last very long. There is no easy way to get out of debt; you have to face up to the consequences.  There are two main options that you should consider rather than file bankruptcy, the first is to consider settling your unsecured debt at a reduced amount this is called Debt Consolidation. The other is Debt Counselling; this service can be a good start in helping you deal with your financial difficulty.

Another option is borrowing against the equity in one's home to pay down credit card debt. Not being able to pay your home equity loan could leave you in a worse position than not being able to pay your credit card debts.

If you find yourself in this situation it is best to contact your lender immediately, they may be able to arrange a way for you to repay the loan based on your current financial situation. You could ask them to provide a temporary reduction or suspension of your payments until such time that you get in a better financial position. You may qualify for this if your financial situation changed due to the current loss of a job or if you had an unexpected increase in living expenses. You must provide information to them to show that you would be able to meet the requirements of the new payment plan.

Another way to ensure that your mortgage payment is being made is to make a mortgage modification by refinancing the mortgage or extending the term of the loan and pay it off slowly.  This will help you to catch up by making the monthly payments more affordable. You may qualify for this if you have recovered from your financial problem but your income is now less that it was before.

You may also be able to have your mortgage company file for a Partial Claim this is an interest free loan from Housing and Urban Development (HUD), they will pay the lender the amount necessary to bring your mortgage current. You may qualify if your loan is at least four months delinquent but no more than twelve months, the mortgage is not in foreclosure and you are able to begin making full mortgage payments.

You will be required to sign a promissory note and a lien will be placed on your home until the loan has been paid in full. The note is interest free and will be due if you sell or leave your property or when the mortgage matures.

A pre-foreclosure sale will allow you to sell the property and pay off the mortgage in order to avoid foreclosure and the damage to your credit. You may qualify if the appraised value is at least 70% of the amount you owe and the sales price is 95% of the appraised value. The loan is at least two months delinquent prior to the pre-foreclosure sale closing date and you are able to sell the home within the time frame specified by the mortgage company. Another benefit is that you will be able to receive help with the seller paid closing costs.

And finally, you may be able to “give back” the property in lieu of a foreclosure. This won’t save your home but it will help you in the future in obtaining another mortgage. You can qualify if you are in default and do not meet the qualifications for any of the other options, attempts made at selling the house prior to foreclosure were unsuccessful and you don’t have another mortgage in default.

Talk with your mortgage company to see if you qualify for any of the above options.