Alexandria Legal Blog

If your mortgage is in default and you've received a notice of foreclosure, there's no time like the present to take action. There are many things you can do, with none more important than contacting your lender to discuss any workout options that are available.

A workout is nothing more than a compromise between you and the lender, all with the idea of modifying the terms of the loan to help you stay in your home.

As the holiday season closes in, it won't be long before you're making a list of the many expenses that you're sure to face in the months to come. Organization is a good start to staying within your budget, but there's no guarantee you won't overspend.

With access to a credit card, it's easy to go overboard during the holidays. From gifts to hosting a party, you know there are quite a few ways to spend.

It's easy for credit-card debt to spiral out of control, especially since you're only required to make a minimum payment every month. If this happens, you'll soon find yourself searching for answers.

Here are several tips that can save you from too much credit-card debt:

• Pay your balance in full every month: This is the best advice you can follow, as paying your balance in full means you're never dealing with credit-card debt. To do this, you must know how much you can comfortably afford to pay every month.
• Don't skip payments: There is never a good time to skip a credit card payment, as doing so will result in a late fee as well as a red mark on your credit report.
• Avoid maxing out your credit card: Just because you have a $10,000 credit limit doesn't mean you have to spend $10,000. As a general rule of thumb, keep your balance at 30 percent or less of your total credit limit.
• Get something in return: If you qualify for a rewards credit card, you should take advantage. This allows you to earn points or cash back for every dollar you spend. It doesn't necessarily save you from debt, but it does give you something to counteract your spending.

If you receive a foreclosure notice, it's hard to devise a plan in a timely manner. With so much going through your mind, including the possibility of losing your home, it's not out of the question that you'll make a decision that puts you in a worse position.

Before you do anything, here are some of the most important foreclosure questions to address:

• What is the reason for the foreclosure notice? Obviously, it's because you have fallen behind on your mortgage payments. You want to dig around to find out why this happened. For example, you may realize that you have too much credit-card debt to comfortably make your mortgage payment as well.
• Will your bank help you prevent foreclosure? Don't assume that your lender wants to repossess your home. They'd rather work something out with you, so don't hesitate to ask. A mortgage modification may be within reach.
• Is it possible to sell your home? If you can no longer afford your mortgage payment, you may want to sell your home to escape trouble. This works if your home is worth more than you owe. If it's not, you'll need to consider a short sale.