What choices do I have when responding to a foreclosure notice?

A foreclosure notice is a terrifying experience for a homeowner. Not only are you in danger of losing your house, but you may also wonder what will happen to your credit score and if you can find yourself in any additional legal trouble as a result of the foreclosure. When you receive a foreclosure notice, you have a few options:

• You can contact your lender to try to work out an alternative. For example, you may explore a hardship forbearance where payments are temporarily suspended, or you may be able to have your mortgage terms renegotiated under one of several programs designed to help struggling homeowners (such as HAMP). 
• You can try to arrange a short sale. This means selling your house for an amount that is equal to less than the total balance owed, and getting the lender to agree to accept this money as full payment on the debt you owe. This is a better option than foreclosure as it is less damaging to your credit. It also protects you from a deficiency judgment wherein the bank sues you for any money that remains unpaid after a foreclosure sale of your home
• You can contact a lawyer and explore ways to stop or delay the foreclosure. For example, your lawyer can use the "show the note" defense to demand that the lender produce the original mortgage note. This can delay foreclosure and buy you some time
• You can declare chapter 13 bankruptcy. This will force the bank to immediately stop any foreclosure action. This isn't a permanent solution, though, as you'll either need to get current to keep the house or you'll need to convince the lender to modify your mortgage.

The right choice depends on your personal situation. A lawyer can help you to assess your options and decide on the best course of action.