A foreclosure can be a devastating experience for any homeowner. Foreclosure not only means the homeowner may lose their home, but also brings with it credit damage. When a homeowner starts struggling to make mortgage payments it is an early sign that a foreclosure may be in the future. Homeowners should learn to recognize and handle these early signs of a foreclosure so they can avoid the whole damaging process.

When a foreclosure begins it starts a legal process that is hard to get out of without some financial or credit damage. Fortunately there are early signs that a homeowner may be in danger of a foreclosure. Unexpected life changes and sometimes even anticipated changes are often a contributing factor to foreclosure – especially those that impact your finances, such as:

* Loss of employment or reduction of hours
* Major illness or injury
* Divorce or separation
* Death of a spouse
* Recent, large purchases
* Steep and unaffordable increase in your mortgage payment

Handling financial problems is becoming more and more important. With credit easily and readily available some people are falling into the credit trap. The credit trap is where a person starts using credit cards as if they were cash and burying themselves in debt.

These difficulties are all warning signs of financial problems that can lead to foreclosure on your home if you do not act quickly. They include:

* Maxing out credit cards
* Using credit to pay for day-to-day expenses, such as groceries, utilities, etc.
* Being unable to pay your bills on time
* Paying only the minimum amount on credit cards
* Applying for new credit cards after maxing out on existing ones
* Having to choose which bills to pay

For someone who is experiencing early warning signs that a foreclosure may be in the future, trying to fix the problems is the best way to avoid a foreclosure.