Although my bankruptcy law offices are all in the state of Indiana, I like to stay on top of bankruptcy, foreclosure, and consumer debt news in other parts of the country. R., my banker friend from Portland, Oregon (the one who told me the story I shared in West Coast Story About Blockbuster Builder Gone Bankrupt) told me another true story, this one about a foreclosure that might have been prevented, but wasn’t.

R. received a call from a client saying a neighbor of his needed R.’s help and advice. The neighbor then got on the phone and explained to R. that he’d be losing his home to the bank in one week. The house had been appraised at $650,000 or so, and the mortgage balance was just under $400,000. R. began calling around to his own bank people and other lenders, but a loan package couldn’t be put together quickly enough. In fact, had there been just two more working days, a private temporary loan might have been worked out and the foreclosure might have been postponed long enough to obtain permanent refinancing. The worst of it is that, in Oregon, the owner loses his equity in a foreclosure. By waiting too long to get help, this debtor lost all his options, and also the equity he’d built up in the home..

As I emphasize in many of my bankruptcy blog posts (see Going, Going, Gone On Home Foreclosures), during the twenty-plus years I’ve practiced bankruptcy law, I have been urging folks to get professional advice as soon as their circumstances take a downward turn. The earlier I can help clients explore different options and negotiate with their creditors, the more options will be open to them.