Q: We have just been served with foreclosure papers. We have been in our home two years and I am now unemployed and on disability due to severe health problems. My disability checks should begin to come in two months.

Because we’re having trouble managing everything without income, we’ve decided to file for bankruptcy. We understand some of the risks but we are hoping not to lose our home. Where do we begin to take care of these important issues?

A: It is unfortunate that your situation has become so desperate. I wish you had written to me sooner. You tend to have more options available to you before your lender puts your home in foreclosure. But let’s take things one step at a time.

The most important debt you have is your mortgage, and you should start talking to your lender about what you can do to save your home. Your lender may be willing to extend your payments or make some accommodation for you, although now that your house has gone into foreclosure, it may be tougher to work things out.

If the lender won’t help you in any meaningful way, you may wish to talk to a credit counseling service about your situation before you file for bankruptcy. Look for a not-for-profit service that can help you understand your options and your situation, like the National Foundation for Consumer Credit (www.nfcc.org), which is affiliated with more than 1,000 Consumer Credit Counseling Service offices nationwide (800-388-2227 or www.cccsinc.org).

The non-profit credit counseling office you choose should be willing to sit down with you and discuss your financial situation and determine whether you can budget yourself out of your problems. Bankruptcy and debt management programs should be your last option.

Sept. 16, 2004.