A common question when speaking with home owners who are trying to stop Foreclosure on their homes, is how a Foreclosure will affect their credit rating. Most everyone knows that having a Foreclosure on their credit report is bad, but just how bad can it be?

“Foreclosure will definitely have a severe negative impact on your credit,” Miami consumer lawyer Samira Ghazal said. It is a major financial blemish that remains on your credit reports for seven years, making it difficult for you to obtain new credit other than high-interest, sometimes predatory, loans.

A Chapter 13 bankruptcy is just as bad as a Foreclosure and although you get to keep the house and make payments arrangements, those payments will be higher than your existing mortgage payment. You will have to make your mortgage payment, plus the bankruptcy payment, plus the trustee fees.

In short, bankruptcy will only prolong the Foreclosure process and can set you back further than you are now. If you fall behind and the lender files for a Stay of Relief, you will be right back to fighting to stop the Foreclosure again.

If you are facing Foreclosure, do not surrender to it. Fight to keep your home. Do not put your head in the sand. Contact your lender first and try to make repayment arrangements to get back on track. Sometimes, for an additional long-term cost, lenders will set up a special forebearance, refinance or other repayment arrangement that will keep Foreclosure at bay.

For more advice on preventing Foreclosure, complete our free, no obligation pre-Foreclosure request form and a Certified Loss Mitigation Consultant will contact you to discuss your options.

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