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Try to set up a “debt workout” plan if your bank or mortgage company is agreeable. You might want to make it your goal to “convince” them to become agreeable to a workout plan. This is always preferable to a declaration of bankruptcy. Think about your plan first! Before you contact your mortgage lender, have an idea in mind that is reasonable – to you and to them – and be ready to explain both your situation and why they should consider your proposal. Have a proposal ready that explains how much of the scheduled mortgage payment you can make on a monthly basis, how long you think you need to stay at this level, and what you are planning to do to “fix” your current default situation in the future. If they accept and you avoid declaring bankruptcy, you, your family and your mortgage lender have a win-win situation.