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What Really Happens After Foreclosure?
Facing foreclosure is a tough and overwhelming situation. For many it doesn't even feel real. Things get very real when the police show up to your home unannounced and throw out you and all your belongings. And the damage doesn't end there. It might feel comfortable to take no action or waiting till the last minute but letting your home go into foreclosure can leave you with lasting damages that make it significantly more difficult to recover.
It's crucial to explore other options and do everything you can to avoid foreclosure. Here's why:
Loss of Home: An obvious one. Foreclosure not only results in the loss of your home, displacing you and your family, but also forfeiting any equity built up in the property.
Forcibly Removed: After the auction, if you are not out, the new owner will have the Sheriff evict you. Ultimately, you and your belongings will be forcibly removed from the home and placed on the street. Re-entry would be considered breaking and entering.
Damage to Credit Score: A foreclosure can significantly lower your credit score, making it difficult to obtain loans or obtain future credit, including credit cards, auto loans, or personal loans, often leading to higher interest rates if credit is approved.
Difficulty in Renting or Buying Property: A foreclosure on your record can make it challenging to rent or purchase another home, as landlords and lenders may view you as a high-risk tenant or borrower.
Deficiency Judgments: If the sale of the foreclosed property doesn’t cover the outstanding mortgage balance, lenders may seek a deficiency judgment to recover the remaining amount.
Impact on Employment Opportunities: Some employers check credit reports as part of the hiring process, and a foreclosure could negatively impact job prospects.
Legal and Tax Consequences: You may face legal fees, and in some cases, forgiven mortgage debt could be considered taxable income by the IRS.
If you’re facing foreclosure, the longer you wait, the fewer options you'll have, don’t wait. Reach out to us to discuss your options, whether it’s saving your home or selling it. We’re here to help you make the best possible decision for your future.