Author: Juliana Montgomery
When looking at bankruptcy vs foreclosure, you should think about several different parts of your finances. It is important to educate yourself regarding all parts of each option. This includes current and future consequences as well as the suitability of the solution for your circumstances. Both have long term ramifications and neither is a great option for your financial problems.
What About Your Credit Score?
Your existing credit score should be something you think about when choosing between bankruptcy vs foreclosure. In the majority but not all situations, foreclosure impacts your credit less negatively than bankruptcy. It is vital to find out for sure. Depending on your circumstances, you might discover that your credit score will get better within a year of bankruptcy. If you have had problems with your credit for years, bankruptcy can offer you a clean credit slate. This might help you start the process of rebuilding your credit. At times individuals decide not to make payments to other lenders when they are in the center of foreclosure in an attempt to stay current on the mortgage payments. If this is the case for you, your credit has taken a significant blow by the combination of late mortgage payments and late payments to other creditors. If your mortgage payment is the only one you have been delinquent on, it might be less damaging to your credit to allow your bank to foreclose.
Considering All of Your Debt
If you owe several thousands of dollars in credit card debt, private loans, or medical loans in addition to your mortgage debt, the better solution in the bankruptcy vs foreclosure argument might be bankruptcy. In many circumstances, bankruptcy removes not simply your mortgage debt but your other debts too. It will compel you to live on the earnings that you bring in and to adjust how you handle cash. There are particular kinds of debt like student loans and overdue taxes that generally can’t be discharged in bankruptcy. If these types of debt make up the best part of your other debt, bankruptcy might not assist you. Foreclosure would likely be a excellent choice if you do not have much debt besides the mortgage. Paying your other debt on time and in total can help you in re-establishing your credit more quickly following foreclosure.
Existing Income
There are rules concerning income when it comes to bankruptcy. You can’t file a chapter 7 bankruptcy if your earnings is higher than the median earnings level for your state. This is an crucial issue when it comes to bankruptcy vs foreclosure. The U.S. Department of Justice has a active list on their site of norm earnings levels for different states. The total number of individuals in your family unit is also a issue. If you could not meet the requirements for aid from your bank because of your pay level, you might have the same difficulty when it comes to bankruptcy. In this instance, your lone solution may be to agree to your bank to foreclose.
Checking with a bankruptcy attorney is the best approach to understand what bankruptcy can and can not do for you. A great technique to understand for sure if you take home too much money or if you have non-dischargeable loans is to speak to a bankruptcy lawyer. They might be able to run a credit check for you to find out what your present credit score is and tell you just how much bankruptcy will impact your credit score.
Disclaimer: The author does not guarantee the accuracy of the information provided in this article and is not liable for reliance on this information. In using this article, you agree that its information and services are provided “as is, as available” without warranty, express or implied, and that you use this article and the information contained in it at your own risk. You agree that the author has no liability for direct, indirect, incidental, punitive, or consequential damages with respect to the information, services, or content contained in this article.
No matter which way you go in the bankruptcy vs foreclosure discussion, be all set for this to influence the next seven to 10 years of your monetary life. Extra questions to ponder and further bankruptcy options are here.
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[…] Your existing credit score should be something you think about when choosing between bankruptcy vs foreclosure. In the majority but not all situations, foreclosure impacts your credit less negatively than bankruptcy. It is vital to find out for sure. Depending on your circumstances, you might discover that your credit score will get better within a year of bankruptcy. If you have had problems with your credit for years, bankruptcy can offer you a clean credit slate. This might help you start the process of rebuilding your credit. At times individuals decide not to make payments to other lenders when they are in the center of foreclosure in an attempt to stay current on the mortgage payments. If this is the case for you, your credit has taken a significant blow by the combination of late mortgage payments and late payments to other creditors. If your mortgage payment is the only one you have been delinquent on, it might be less damaging to your credit to allow your bank to foreclose.Source: homemortgageontario.ca […]
[…] […] Your existing credit score should be something you think about when choosing between bankruptcy vs foreclosure. In the majority but not all situations, foreclosure impacts your credit less negatively than bankruptcy. It is vital to find out for sure. Depending on your circumstances, you might discover that your credit score will get better within a year of bankruptcy. If you have had problems with your credit for years, bankruptcy can offer you a clean credit slate. This might help you start the process of rebuilding your credit. At times individuals decide not to make payments to other lenders when they are in the center of foreclosure in an attempt to stay current on the mortgage payments. If this is the case for you, your credit has taken a significant blow by the combination of late mortgage payments and late payments to other creditors. If your mortgage payment is the only one you have been delinquent on, it might be less damaging to your credit to allow your bank to foreclose.Source: homemortgageontario.ca […]Source: homemortgageontario.ca […]
[…] […] […] Your existing credit score should be something you think about when choosing between bankruptcy vs foreclosure. In the majority but not all situations, foreclosure impacts your credit less negatively than bankruptcy. It is vital to find out for sure. Depending on your circumstances, you might discover that your credit score will get better within a year of bankruptcy. If you have had problems with your credit for years, bankruptcy can offer you a clean credit slate. This might help you start the process of rebuilding your credit. At times individuals decide not to make payments to other lenders when they are in the center of foreclosure in an attempt to stay current on the mortgage payments. If this is the case for you, your credit has taken a significant blow by the combination of late mortgage payments and late payments to other creditors. If your mortgage payment is the only one you have been delinquent on, it might be less damaging to your credit to allow your bank to foreclose.Source: homemortgageontario.ca […]Source: homemortgageontario.ca […]Source: homemortgageontario.ca […]
[…] […] […] […] Your existing credit score should be something you think about when choosing between bankruptcy vs foreclosure. In the majority but not all situations, foreclosure impacts your credit less negatively than bankruptcy. It is vital to find out for sure. Depending on your circumstances, you might discover that your credit score will get better within a year of bankruptcy. If you have had problems with your credit for years, bankruptcy can offer you a clean credit slate. This might help you start the process of rebuilding your credit. At times individuals decide not to make payments to other lenders when they are in the center of foreclosure in an attempt to stay current on the mortgage payments. If this is the case for you, your credit has taken a significant blow by the combination of late mortgage payments and late payments to other creditors. If your mortgage payment is the only one you have been delinquent on, it might be less damaging to your credit to allow your bank to foreclose.Source: homemortgageontario.ca […]Source: homemortgageontario.ca […]Source: homemortgageontario.ca […]Source: homemortgageontario.ca […]