Avoiding the F(oreclosure) Word

In most cases, people have exhausted every avenue available to them when it comes to saving their home. But with mortgage rates through the roof and the cost of everything else going up, sometimes you just can't make ends meet. It's a tough situation to be in, but cheer up! There may be light at the end of the tunnel.

First, consider putting your house on the market for sale. This could go two ways. You may get lucky enough to find a buyer that is willing to go for the asking price and you'll make a little money in the process. But you might also have to sell it for less than you owe. This is called a short sale and you have to have lender approval beforehand. Some banks won't even discuss this option until you're past due, but they may at least be willing to settle for some money as opposed to just taking your house.

If selling the house isn't an option, you can try a loan modification. However, be forewarned: lenders are overwhelmed with such requests, so getting someone to talk to you about it is often the hardest part. Still, if you want to try and keep your house, this is one of the best ways to go.

A final option, and one that should not be considered lightly, is to file Chapter 13 bankruptcy. There are several stipulations, so you'll want to look into the logistics BEFORE you make a decision to go this route. Find a bankruptcy attorney who can guide you.

In the end, try every option available to you before you walk away from your home and ruin your credit. Having a foreclosure on your credit report could haunt you for many years.

Are you worried that foreclosure is in your future? How do you think these options may help? [Bankrate]