How To Stop Repossession.

Take legal and financial advice. A good legal adviser will make sure the lender is following the law and not making it difficult for you to make payments and clear your debts. They can also help you if you need to go to court. They can explain the process and make sure that you have all the supporting documentation you need.

Have all your correspondence with all the parties involved in a file. List details of all your expenses and income history. This will show that you are organised. You may even have a plan on how may sell your house quickly. Preparation may help convince the court that you need extra time to sort out some loose ends.

USA: Contact the Housing and Urban Development Department (HUD) to locate a government approved counseling agency. Their website at http://www.hud.gov also has good information on options, as well as information on the New Jersey Fair Foreclosure Act.

Basic lending guidelines require all liens on the property should total less than 70% of the current market value. If you have more equity than that, refinancing should be easy, or get a second trust deed to bring your loan current. Expect higher interest rates and loan fees.

USA: There are several other alternatives available. You may consider forbearance, refinancing, modification, deferral of principal, a temporary indulgence and a Chapter 13 Bankruptcy.

Stay in the property and don't abandon it. This looks better if you have a court case.



Talk with your lender. Explain your problems. Explain how you can repay the installments if given more time. Show him your new plan. In most cases lenders are sympathetic towards their customers: What's more costly in time and money; getting the house off you, or giving you a bit of leeway?

USA: Try not to declare bankruptcy. It can halt or at least slow down the repossession process, but it'll be on your credit record for ten years. It will be visible to everyone (including future employers), in the court records.  You wont be able to declare bankruptcy again for another eight years; you can't use that trick again.

Going for a bankruptcy is credit suicide. I get calls from people looking for a loan whom _everyone_ has turned down, or offered ridiculous terms to. The reason: they were once bankrupted.

It's better to try to salvage the situation through remortgaging or negotiation with your creditors.

You may be told to sell your home quickly to grab the equity in it. You need to release capital quickly to stop repossession. There are property-buying companies keen to complete and give you funds quickly.

But beware!

- The offer they make to you can as little as 70% of its market value.
- As you'll not be a homeowner any more you'll likely find it impossible to get back on the property ladder; you'll have no equity left.
- Selling the place then renting it back from your 'saviour' could leave you paying the same amount, in rent monthly, as your mortgage.

USA: As with any disaster, there are those who can make money from it. In the US, there are foreclosure specialists. If you choose to hire one of these:

- Ask them how many foreclosures they have negotiated, and if they have any references. The best reference is from a good friend of yours or a family member.

- Are they members of trade organisations that vet their members? Some trade organisations just require you to pay a fee to join.

- Some promise 'no risk' solutions. This is just marketing. The real McCoy will explain what will happen in detail, and provide you with all the options, _including_ foreclosure.

- They may charge a flat-fee, only to proceed with foreclosure with or without your knowledge.

- They may advertise a low fee then inflate it.

- They may charge you thousands of dollars to purchase your home and then rent it back to you.

- They may resell your home, making a fat profit on the deal.