What can you do to avoid foreclosure? First, contact your lender and explain your situation. See if you can work out any kind of an arrangement with them to reduce or skip any payments temporarily or until your situation improves.

Next, call the Colorado Foreclosure Hotline at 1(877)601-HOPE or check out ColoradoForeclosureHotline.org. They have been able to help the majority of homeowners who have contacted them avoid foreclosure.

You may want to consider trying to sell your home, especially if you have any equity you want to save. Contact a reputable real estate agent or several to get a market analysis on your home. Look at what comparable properties have sold for. Ask for a realistic time frame for selling your home at various prices. Don’t just go with the agent who gives you the highest price. Be critical and analyze all of the information you gather. You need an agent who is brutally honest with you, not one who just tries to agree with you.

Even if your current loan amount is close to the market value of your home, it might be worthwhile for you to sell. The lender might agree to a “short sale” for less than the loan amount, or you might bring some money to closing to avoid the impact of a foreclosure on your credit rating.

If you are considering the possibility of a short sale, get legal advice. Investigate potential tax and other consequences. Determine whether you might have any basis to chalenge the foreclosure at the Rule 120 hearing.

The most important thing is to take action right away, and not wait for the foreclosure process to start. There is a short window of time to attempt to sell after receiving a Notice of Election and Demand, but, in today’s market, it is better to give yourself as much time as you can.