An estimated 250,000 families go into foreclosure every three months, according to the Federal Deposit Insurance Corporation (FDIC). My husband and I nearly joined that number. Fortunately we found help, thanks to credit counseling and a deed in lieu of foreclosure.

I’ve described how we found ourselves in a real estate nightmare. We’d been trying to sell it for two years with no luck. Finally, the home needed a $35,000 repair that we didn’t have the money to fix. We couldn’t sell it; we couldn’t rent it out to cover the mortgage; and we couldn’t pay the mortgage on our own.

A financial adviser would have helped navigate us through these thorny issues — if we had one. Instead, I was left with a flurry of questions. Should we raid our retirement accounts to pay for the repair? Should we go into foreclosure? Should we pack up and move to an uninhabited island and adopt new identities?

Finding Someone Who Could Help

Instead of jumping on these first thoughts, I turned to the internet. A quick Google search revealed that we had some options. Unfortunately, we had to choose between the lesser of many evils. Things didn’t look good, no matter which way we sliced it.

I felt uncomfortable making such a big decision on my own without input from people who knew more than I did. But where could I go for help?

On a whim, a friend told us about the National Foundation for Credit Counseling (NFCC). This is a nonprofit group of ethical, compassionate, and certified credit counselors who help people do everything from learning basic money management skills to navigating rocky financial patches like the one we were going through with our home.

I filled out a form on its website and asked for help.

Our First Credit Counseling Appointment

I dejectedly explained the situation on our first phone call, expecting the counselor to agree with me and say, “Gee, you really are screwed.”

But she didn’t even skip a beat. She told me that the NFCC helps people out with these problems all the time, and that it could help me, too. It wouldn’t be easy, and it wouldn’t be fun, but the NFCC would help us choose the best option for our situation.

After a couple of phone calls, the counselor agreed: We didn’t have many options. But the least bad choice was to do a deed in lieu of foreclosure.

What Is a Deed in Lieu of Foreclosure?

A deed in lieu of foreclosure is much like when you go back to the store after the holidays and return those oversize clothes your grandma sent you.

In this case, you ask your mortgage company permission to hand the deed back over to them along with any equity in return for being 100-percent free of the house and the mortgage. You can then move on with your life.

Banks don’t offer this to just anybody. You need to demonstrate that you’re going through hardship and can't pay the mortgage.

Without help, you'll go into foreclosure — something that banks and homeowners alike try to avoid.

The Deed in Lieu of Foreclosure Process

We needed to write the bank a letter of hardship explaining the situation and telling them that we would like to pursue a deed in lieu of foreclosure. Our credit counselor offered to write the letter and send it for us, and we graciously accepted.

We also needed to call the bank and confirm again that we were pursuing a deed in lieu. Again, our counselor called our mortgage company with us on the line. She was able to get us through to the right people and get the ball rolling on the deed in lieu of foreclosure process.

The Cost of Credit Counseling and the Deed in Lieu of Foreclosure Process

Amazingly, none of this help cost us a cent. Credit counseling companies do charge a small amount for some of their services. However, because they're nonprofits, they can also help some people for free.

We were finally able to complete the deed in lieu of foreclosure process four months later, after repeatedly pestering our mortgage company. (They seemed to be dragging their feet.)

Now we’re able to stay afloat and even make financial progress toward our goals because we have an extra $1,300 back in our pockets each month — not to mention the money all the expensive home repairs that we no longer have to pay for.

If you’re in a tight financial spot and feel like you have nowhere to turn, don’t be afraid to reach out for help. Our credit counselor made us feel like we were in control when we felt like we were headed for an inevitable train wreck. We wouldn’t have been able to make such a big decision on our own. But now that it’s over, we can finally start moving ahead.