09/05/2013 05:38 EDT | Updated 11/05/2013 05:12 EST

How to Deal With Home Foreclosure

When you find yourself buried under a pile of unpaid bills, relentless phone calls from collection agencies, disconnection notices, lack of food in the house to feed your children. Can it get any worse? Yes, you "just got served". You just received the Notice to Foreclose from the bank informing you that they filed a demand with the court to foreclose on your house. In such a desperate situation, will it not make the strongest of us tremble and weep?

First of all let me tell you that regardless of how you feel at the moment, losing your house in a foreclosure is not the end of the world; life will go on even if it must come to that. You and your family will not cease to exist because of it.

You know you are in deep financial trouble and must be wondering if there is anything that you can do to defend your house from an imminent foreclosure.

The very first thing that I encourage you to do is to assume the role of the adult in the family and take full responsibility for the situation whether it was your fault or not. Now more than ever your family needs you to take control of the situation, to encourage them and give them hope.

Now that you have assumed full responsibility of your financial situation, what are you going to do? Let me ask you another question, are you hiding or seeking? More specifically, are you hiding from the bank collection agent? Or are you seeking a solution to your problem? If you keep hiding and fail to confront this matter, you will never be able to find a solution. Why? Because you are simply not looking for a solution.

Let me ask you again, what are you going to do? Are you going to keep hiding or are you going to start seeking? If your answer is to start seeking then I may be able to help you.

The second thing that you must do is to make the unwavering decision to defend your house. Do not let the bank take away what belongs to you and your family. The simple act of making the decision to stand and fight for what is rightfully yours, will dramatically improve your chances of successfully defending your house. Your physiology, the way you feel and think will change. Now you are no longer running scared and hiding. Now you are taking a stand and ready to defend what belongs to you.

Now that you have made the unwavering decision to defend your house, let's get to work. What else must you do?

You must identify the cause of the problem, why can't you make the mortgage payments? Is it because you lost your job? Is it because you have lost your ability to earn an income? Or is it because you spent too much and you no longer can make the minimum payments? A wise man once said that "an identified problem is half solved" and I agree with that statement. When you identify the cause of your problem, you are half way there.

Grab a sheet of paper and write on top of the page "Problem" and under that heading write the cause of your problem. At this point in time it will be wise to create an income and expenses sheet to determine exactly how much your monthly deficit is and how much money is required to cover all your expenses.

Leave a few empty spaces and write another heading "Required." Under this heading write in bold letters exactly how much additional money you need to generate to become current with all your payments and to cover your monthly deficit.

Leave a few empty spaces and write another heading "Solution" here you will start to brainstorm possible solutions to your problem. In this section write every possible idea that comes to mind, now you are engaging your mind in the most effective way and since you are looking for a solution, you will surely find it.

Let's say that you need $5,000.00 to become current with all your payments, how are you going to get your hands on that kind of money? When was the last time that you looked at all the stuff that is stored in your garage or basement? Why not sell all that stuff you haven't used in the last 5 years on EBay or a garage sale? That stuff is worth money and someone will be willing to give you money for it. That is the fastest way I know to generate quick cash in a very short period of time.

What can you do about your monthly deficit? You must take a good hard look at you income and expense sheet in order to reduce or eliminate all unnecessary expenses, especially those little things that we fail to consider as expenses. Take a cup of coffee as an example, if you drink one cup of Starbucks coffee a day. That one cup of coffee is costing you $600.00 per year, are you willing to sacrifice a cup of coffee to save the roof over your head? What other little expenses can you eliminate? They all add up at the end of the month.

What else can you do? I know you do not want to hear this, but you need to call the bank collection agent and make an appointment to come to see him. I know that this is the very last thing that you want to do, but only the bank collection agent has the power to stop the foreclosure process and you need to talk to him. Keep in mind that the bank does not want to foreclose your property. However, they can and will foreclosure if you do not offer then them any other option.

What are you going to tell the bank collection agent? You must convince him that you are willing to do whatever you can to avoid losing your house and for that you need his help to work out a new arrangement that will be beneficial to both. You both have a common goal - you do not want to proceed with the foreclosure. To you it means losing the roof over your head and a ruined credit for several years, to the bank foreclosure represents tens of thousands of dollars in losses and having to report your property as a "NPA" (non performing asset) which affects them adversely.

You can defend your house from foreclosure. Make the decision to defend your house, create an affordable financial plan, present a financial alternative to the bank collection agent in a way that is beneficial to both of you and free yourself from the threat of a foreclosure.

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