Financial trouble can lead to home foreclosure. Maxing out credit cards because you don't have enough cash to pay for necessities like food and utility bills is an indication that you're on the brink of the credit trap - a possible prelude to foreclosure.
What is a credit trap? It is a situation where a person uses his or her credit cards as if they were cash. People who repeatedly do this are digging a debt hole for themselves. If this is not handled well, a major financial mess can take place.
You need to take care not to fall into the credit trap because it can cause you to lose your home. And it doesn't have to happen to you. Control is the key. All you need to do is make sure that you have power over your expenses. How to do it is simple.
The first thing you need to remember is to manage your finances properly. You do this by keeping a budget and sticking to it. Allotting money for every payable will save a significant portion of your income, this also ensures that every bill, electricity, water, and mortgage, is paid off regularly. Budgeting will also reduce your expenses.
Second, keep track of all your expenses. Take note of all the things you buy because this will indicate if you are spending beyond your limits.
Third, learn how to limit credit card purchases. Excessive use often leads to extreme debt. You mount up your bill each time you swipe your card instead of paying with cash. It's okay to do this if you can pay your balances in full each month, but if you can only cover a small portion of the amount, charges and fees could spell trouble for you. Save your VISAs and MasterCards for emergencies and big purchases when you don't have enough cash to spend.
Fourth is to prioritize your spending. You must spend more on things that are more important: medical care, education, food, and mortgage.
Finally, seek help from your lenders if you are experiencing financial difficulties. It's better to let them know as early as possible to prevent a crisis. Remember that your lenders can help you as long as you allow them.
As long as you are careful to avoid getting caught in the credit trap, you can be rest assured that your home can be safe from foreclosure.
Next on the Foreclosure Series: What Your Lender Can Do to Help You Avoid Foreclosure
Housing Assistance Network < http://new.housingassistancenetwork.com > - is a site that aims to help those who are in the low to moderate income brackets find financial assistance for housing, help in acquiring a new home, or grant programs from both state and non-government institutions.