What Options Should We Consider to Avoid Foreclosure? – Joshua

“Dear Steve,

  • 210,000 mortgage – 196,000 owed
  • 4 months behind, foreclosure has not yet started but may within a month or so KS provides 120 days for the foreclosure process
  • 15-20k unsecured credit debt/medical bills
  • My wife has 18k in student loan debt
  • 2 cars, not behind on and I’m not certain how much equity really is in them but the debt is 20k 13k for the 05′ highlander, 6k for the 04′ impala
  • Lost my job 4 months ago
  • I make 1200 a month on unemployment
  • My wife makes maybe 800-1000 a month with her jobs.
  • 3 children and on foodstamps.
  • Trying to find work and if I can find a job that pays 50-70k I’ll do whatever it takes to pay the debt.
  • No 401k or assets other than what is listed.
  • Applied for loan modification and BoA denied it.
  • House is an FHA 6% interest 30 year note. 1600/month payment.

What should I do? I’ve been told to consider bankruptcy, but I have no idea what is really best for us to do and what options we should honestly consider.


Dear Joshua,

This must certainly be an emotionally charged and stressful time for you. I’ve lived through that panic and fear myself and there is nothing fun about it.

While bankruptcy is a legal tool that is available to you it is probably not a reasonable expectation that it will allow you to keep the house. In a Chapter 13 bankruptcy you’d need to make at least the regular mortgage payment plus some to get caught up. I can’t see how the numbers would add up to allow you to do that and still get by.

But it would be worth finding a local bankruptcy attorney you like, schedule a free bankruptcy consultation and go talk to them.

Ultimately the first thing we need to focus on is replacement income. Unemployment is good but will not last forever. That is even more important than the house situation right now. Shelter situations can change and moving is a pain but being homeless sucks. After your unemployment benefits expire, unless you can find income, you could be on the street.

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Just don’t let the mortgage situation distract you from the income issue. I know you are trying but it’s time to make a job of getting a job. You might even have to consider doing what I did when I found myself in that jam. I went and applied with every temp agency in my area, took every assignment they could send me on, and got to experience some horrible jobs. But I did them all with a smile on my face and grateful for any opportunity to earn money.

In the mean time, if you have some extra time on your hands, start going through your stuff at home and start throwing away anything you don’t need. It does not hurt to lighten the load now if you have to move latter.

Please update me on your progress by

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

Damon Day - Pro Debt Coach

Steve Rhode

1 thought on “What Options Should We Consider to Avoid Foreclosure? – Joshua”

  1. I was laid off in March from my company that I had worked at for almost 23 years. I have been drawing a severance paycheck and will until
    August 13th. I have been making my payments barely or at least minimum payments. I still have not been able to find a job. I owe approximately $9000 in credit card debt. $59000.00 on my home, $13000.00 on my second mortgage. I also had to pick up Cobra Insurance which I pay for each month. I am single and I did go see a bankruptcy lawyer. His advice was to stop making payments because my debtors could not take my unemployment. That would possibly give me 4-5 months before I had to file for bankruptcy. In that time any small amount of money I may be able to save I could put back (not in a bank acct) for help in the future. Does this sound like good advice? I should say that my house is in need of several costly repairs that obviously I can’t afford also. What if the foreclose on me before I file bankruptcy?


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