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Foreclosure - Check Out the Facts and the Options
By Jeff Lakie
There are some myths about foreclosure, bankruptcy and credit. If you don't
have the facts, it's impossible to make the best decisions. Take time to learn
about foreclosure, the potential impact on your credit, and some steps you
can take if you're facing foreclosure.
Many people think that once they've settled a debt - no matter how that comes
about - the impact on the credit report is negated. That's not true and your
decisions will remain a part of your credit history, probably for seven years.
That means that your decision to enter foreclosure will be there for every
potential creditor for many years, impacting your ability to obtain credit.
Foreclosure is only slightly better than bankruptcy. Some people call
bankruptcy a ¡°clean slate.¡± In truth, a bankruptcy will likely remain part of your
credit score for even longer - usually ten years.
Foreclosure situations don't happen overnight. Most people struggle for
months (or longer) before the final straw. Often, payments are a little late at
first. As the mountain of debt grows, payments are later. Late charges rack up,
making it more difficult to catch up. One of the most important steps you can
take to avoid foreclosure happens now - well before you've even considered
foreclosure as a possibility.
Start by making every attempt to make your payments on time, every time. If
you see that a payment is going to be late, contact your finance company.
Though it's usually tempting to avoid the phone calls that accompany late
payments, be proactive. Let the company know that you're having a problem
and look for some options. Some finance companies will allow you to pay
interest only on a payment, tacking the principle onto the end of the note. This
isn't a long-term solution that should be taken at the least sign of a problem,
but could be the answer to getting your finances back on target.
If foreclosure seems to be looming, consider finding a credit counselor. You
don't have to pay a fortune for the service - you're already facing financial
problems. There are non-profit counselors who offer services free or for
minimal fees. These can sometimes negotiate payment arrangements
instead of foreclosure.
About the Author
Jeff Lakie is the founder of Foreclosure Resources a website providing information on Foreclosure
Article Source: http://www.simplysearch4it.com/article/10748.html
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