In the beginning of the foreclosure process, homeowners can still save money, their credit or their house if they act quickly. Even when declaring bankruptcy, avoiding a foreclosure on your credit report can salvage your ability to rebuild credit and buy another house, which makes the struggle against a possible foreclosure well worthwhile.

2. Work out a deal. Your lender may be willing to work with you, rather than lose money at a foreclosure sale. This is especially true now that the government is engineering set criteria for adjusting interest rate, loan term and principal down to levels struggling homeowners can afford through the Making Home Affordable program.

3. File Chapter 7 bankruptcy. If you can't get caught up in time, you will not be able to keep the house -- but you'll generally be able to delay the foreclosure sale a month or even several months. Any remaining debt to the lender will be wiped out.

4. File Chapter 13 bankruptcy. If you can afford to make the future mortgage payments and the delinquent payments, too, file Chapter 13 bankruptcy. This is different than Chapter 7, in which assets are liquidated but debts are wiped clean. With Chapter 13, you keep your assets and, under court supervision, you repay your debts under a three-to-five-year plan.