By Karen Lawson
Mortgage Credit Problems Columnist

AARP notes that bankruptcy filings by persons 55-64 increased by approximately151% during 2007, and bankruptcies filed by people aged 65 to 74 increased by about 178% during the same period. Although troubling, this information takes a back seat to increased bankruptcy filings by people of 65 and older; filings for this age range have increased by almost 567%. Declining health, gaps in health insurance coverage, and reduced income can lead to foreclosure.

Avoiding Foreclosure: Considering Alternatives to Bankruptcy

When collection calls and correspondence are stressing you out, it's easy  to look for a quick fix such as filing for bankruptcy. Depending on the types  of debt you have, bankruptcy may not help. Although it can liquidate unsecured  debt, like medical bills and credit card debt, it cannot eliminate certain  types of debts including:

 
• Mortgage loans including home equity lines of credit
 
• Motor vehicle loans (cars, motorcycles, recreational vehicles)
 
• Rental agreements (these aren't secured, but if you don't pay, you can    be evicted.)
 
• Income tax debt
 
• Most types of student loans
 
• Child or spousal support obligations

Although many people get into trouble after losing a job or incurring significant  medical expenses, filing bankruptcy isn't your only option for delaying foreclosure.

 

Getting Foreclosure Help

The prevailing idea that older homeowners are enjoying their golden years  is slipping away. AARP writer Carol Fleck notes that credit card debt levels  are creeping up among consumers aged 55 to 64. Credit card debt and drawing  on home equity can quickly deplete financial resources; although it can be  difficult to refuse help to children and grandchildren, don't risk losing your  home. Community service agencies and HUD  Approved Housing Counseling Agencies can help you avoid foreclosure by  developing repayment plans for mortgage payments and consumer debt.

 

Practice Foreclosure Prevention

Establishing financial priorities and a monthly budget can help you avoid  foreclosure. Your mortgage company expects that your housing payment will receive  first priority for payment, and may not cooperate if you're making credit card  debt or car payments when you've missed mortgage payments. It's important to  have some savings for medical expenses and emergencies. If debt is jeopardizing  your ability to make mortgage payments, get help immediately. Once your mortgage  company files foreclosure documents, the cost of redeeming your mortgage loan  will include legal fees and costs in addition to past due payments.

Other Recommended Consolidation Options Articles

• Refinance or home equity loan for debt consolidation?
• Six Options For Managing Debt
• What You Should Know About New Rules for Debt Relief Services