Six Things To Know About Foreclosure

Mike & Jennifer Rigley Home Selling Team

The Six Things You Must Know About Foreclosure

•Foreclosure may not relieve you of your financial obligation to repay the debt. There are circumstances where you can be served with a deficiency judgment and still owe the debt but not own the house.

•If the lien holder does foreclosure you are considered trespassers and are subject to the eviction process.

•A foreclosure is one of the most damaging things one can do to their credit – even worse than a bankruptcy. It will affect your ability to borrow money for years to come and may remain on your credit report for up to 10 years. Expect a foreclosure to lower your credit score by as much as 250 – 300 points and affect your score for up to 3 years or more.

•A foreclosure may trigger an income tax consequence known as “Debt forgiveness” whereas the difference of what you owed plus legal fess and what the lien holder received for the property at foreclosure could be considered income and is reported to the IRS as taxable earnings at the end of the year in the form of a 1099C.

•A foreclosure may preclude you from obtaining certain job positions that require a security clearance.