What is worse for your credit bankruptcy or a foreclosure?
What is worse for your credit bankruptcy or a foreclosure?
Both bankruptcy and foreclosure can lower your credit score, though bankruptcy is slightly worse. Both are reported for seven years and can cause similar trouble in getting loans and favorable terms. The best way to determine which will be better for you is to talk with a qualified bankruptcy attorney or financial adviser. They can assess your unique situation and offer advice.
While foreclosure can cause fewer negative impacts on your credit, it is still an undesirable option. After a foreclosure, you will likely need to buy another home and a new mortgage lender may not want to work with you. When making a decision about a new mortgage, lenders will review your credit profile. If you have a lower credit score, you are seen as a higher risk than someone with higher credit scores.
If you're struggling with a mortgage and are worried about foreclosure, there's an option called a short sale. A short sale is a way to keep a foreclosure off of your credit report while allowing you to keep the house. If you don't have enough money to pay for a short sale, bankruptcy is an option. Bankruptcy allows you to clear all or part of your piling debts.
Bankruptcy has negative impacts on your credit, but it is not as bad as foreclosure. Foreclosure, however, will result in a judgment against you, which means that a creditor will be able to collect on a debt. While the bankruptcy process may be more beneficial in the long run, foreclosure can be a better choice if you have a good credit history and want to keep your house.
If you have any questions or need a Bankruptcy Attorney, please call this law firm for a free consultation.
Ascent Law LLC
8833 S Redwood Road Suite C
West Jordan UT 84088
(801) 676-5506
