Typically the last action you want to take when attempting to remedy a financial crisis is to file for bankruptcy; while there are some positive aspects to a bankruptcy you most likely do not want to file bankruptcy unless it is the absolute last solution. As a distressed homeowner that is facing possible foreclosure you do have some options.

• Contact your lender and explain your financial situation.  You will have a better chance of receiving some understanding for your bank if you contact them as soon as possible. The worst thing you can do is not contact them. They are more likely to try to help you if they know you are trying to fix the situation.

• Appraise your current situation and determine if it is long term or short term. Knowing the severity and duration of your situation will help you decide what kind of financial help you should apply for.

• Hire a reputable mortgage modification expert to assist you. Be sure to check their credentials thoroughly and never pay anyone in advance to represent you in mortgage negotiations.

• If your current financial situation is only a short term problem then request a forbearance or deferment of your payments. Keep in mind that you will eventually need to make those payments up and also you will most likely be charged interest during the deferment period.

• If you are looking at a long term financial situation then you should investigate the possibility of a mortgage modification.  A mortgage modification can offer several options for reducing the amount of your monthly payments, including longer terms, lower fixed interest and possibly lower principle.

• In the case that you cannot get modifications that you can afford and your situation is long term then you should consider a short sale. While a short sale will relieve you're of your situation there is a good possibility that you will still need to pay the difference owed your bank after the sale of your home.

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