Foreclosure or Short Sale? Which is Worse?

Foreclosure or Short Sale

Losing your house for whatever reason is not an easy event to go through in life. It gets even harder not knowing if your fate will end with a foreclosure or short sale. What happens after that? Your credit score will take a hit, you know that. Here is what to expect in both situations.

Foreclosure or Short Sale? Which is Worse?

Credit Score

In terms of the impact on your credit score, they’re about the same. A foreclosure or a short sale will hit your score about 100 to 150 points. If you are able to negotiate a short sale without ever being late on your mortgage – which is extremely rare – it’s only about 10 to 20 points off your score. Although that hardly has an impact, it shows that the late payments are what will kill you.

Waiting Period

Another aspect to consider between foreclosure and short sale is the waiting period for when they come off your credit report, which is a different consideration than your credit score. This all depends on the loan you’re getting. For an FHA loan, there’s no difference between the two: they’re both 3 years. Both stay on your report for seven years from the date the first delinquency is reported. Not the date of the foreclosure, but the date of the first delinquency.

Deficiency

One more thing to consider is deficiency balance. A deficiency balance is the difference between what you owed on the loan and what you got from the sale of the house. That deficiency balance is something you want to consider. Typically, in a short sale, part of the negotiation is that the deficiency balance is forgiven, or the short sale is a new agreement that your realtor negotiates. In most of the short sales, everybody gets that.

Foreclosures are a different story (depending on the state you’re in). In many states, the bank can go after you for the deficiency between what they get at the auction and what you owed on your mortgage. However, there are many states out there, like Arizona for example, that are anti-deficiency states, meaning they can’t go after you for that. In fact, they can’t even report that deficiency balance on your credit report. An anti-deficiency balance means the bank chose to foreclose and therefore waived the right to sue you for the deficiency balance.

Do you have any questions regarding foreclosure or short sale? Let us know.

To enlist the help of a trustworthy, effective credit repair company, call us today at 1-866-991-4885!


No matter what your situation, Go Clean Credit has a solution. We have many credit repair programs that are available to help you overcome your credit situation and place you back on the path to financial success. Real credit restoration is not a once size fits all model and we tailor your needs to the right program, but most people can start for just $99 per month.

We have fixed price programs that get you back on track in as little as 5 months, debt resolution solutions, programs geared toward people who have had recent short sales or foreclosures and many others. Help is just a free phone call away, or you can fill out an appointment request. Contact Go Clean Credit to schedule a free consultation today.

What Happens To Your Mortgage When You Die?

what happens to your mortgage when you die

What Happens To Your Mortgage When You Die?

Owning a home is part of the American Dream. But in today’s world, it’s more along the lines of having a hefty mortgage payment that you’ll probably have until the day you die. And if that is the case, what happens to your mortgage when you die?  There are a few things that could happen, but it really just depends on the actions you take while you’re alive.

What Happens To Your Mortgage When You Die?

If you do pass away with some of your mortgage left to pay off, chances are none of your family members will have to directly pay it off. The only person who will be in line to pay off the remaining balance would be the person who co-signed with you, which may be your surviving spouse. However, if he or she continues to live in the house, it may not prove to be much of a problem. Your spouse may also choose to use your life insurance policy to pay off what remains of the mortgage, granted that you have one that pays out upon your death. Or, they may choose to just sell the house to pay it off in its entirety.
If you’re the sole signer of your mortgage, your lender has the power to decide the fate of your home, which could mean anything. However, you can ensure your home stays in your family by stating in your will that it will go to an heir. Unfortunately, that doesn’t mean they will necessarily have the capability to continue making mortgage payments. This means that, sadly, they would likely have to sell the house anyway to pay off the mortgage.
But don’t worry—there are still certain circumstances that could allow your home to remain in your family. Your mortgage lender may call due your mortgage debt if your estate contains a lot of liquid assets, as he or she will be able to use them to satisfy the balance on the loan. While this may not seem like the greatest option since it will reduce the amount of money your surviving spouse or heirs may keep, it is an option that will ensure the bank doesn’t take possession of your home.
Your home is still liable to be foreclosed upon by your mortgage lender if your estate is too small to satisfy your debt. However, this process can be stopped by the executor of your estate at anytime if a willing heir steps forward and makes payments on your mortgage. Unfortunately, your home will most likely be sold through a sheriff’s auction if that does not occur.

Do you have anything else to add about what happens to your mortgage when you die?  Let us know!


No matter what your situation, Go Clean Credit has a solution. We have many credit repair programs that are available to help you overcome your credit situation and place you back on the path to financial success. Real credit restoration is not a once size fits all model and we tailor your needs to the right program, but most people can start for just $99 per month.

We have fixed price programs that get you back on track in as little as 5 months, debt resolution solutions, programs geared toward people who have had recent short sales or foreclosures and many others. Help is just a free phone call away, or you can fill out an appointment request. Contact Go Clean Credit to schedule a free consultation today.

What Happens To Your Credit When You File Bankruptcy?

What Happens To Your Credit When You File Bankruptcy

If you are facing a tough decision with your finances—namely, bankruptcy—it’s important to understand the aftermath. What happens to your credit when you file bankruptcy? How do you move forward following a bankruptcy?

What Happens To Your Credit When You File Bankruptcy?

First things first: Don’t panic.

Many people consider bankruptcy when looking to relieve debt stress. However, the damage may not be as bad as you think. You also have options to rebuild your credit.

A Chapter 7 bankruptcy involves the collection as well as the liquidation of non-exempt assets. The non-exempt assets’ proceeds are then distributed to your unsecured creditors. This is generally a faster process than a Chapter 13 bankruptcy—which calls for a 3-year to 5-year repayment plan. There are a few differences when looking at these two types of bankruptcy, including what happens to your credit when you file bankruptcy.

Both Chapter 7 and Chapter 13 cases will be reported under the public record section of your credit report. This same section of your credit report is where court cases involving creditor judgments are listed.

A bankruptcy case will be reported in the public records section for 7-10 years, depending on the bankruptcy case filed. The creditors listed in your bankruptcy case (who are later discharged in the bankruptcy) will still show up on your credit report. These accounts will be labeled “Included in Bankruptcy.”

  • Chapter 13 bankruptcy shows up for 7 years
  • The bankruptcy will be deleted from the public records section 7 years from the filing date of the bankruptcy case
  • Chapter 7 bankruptcy shows up for 10 years
  • The bankruptcy will then undergo deletion from the public records section 10 years from the filing date of the bankruptcy case

For many of those who are suffering from financial troubles, your credit has probably already taken a hit from late payments, judgments, high balances as well as charge-offs. If this resembles your current situation, then your credit score might only be slightly lower, the exact same, or potentially a little bit higher. Bankruptcy can sometimes provide you and your credit report with a fresh start.

As previously noted, your bankruptcy filing will be listed – and this occurs in place of judgments or high balances. Thus, it can help equalize your credit report.

During a Chapter 13 bankruptcy case, you’ll get the chance to boost your credit score with every on-time monthly payment you make while the case is pending. If you can file a Chapter 7 case, you should be able to begin working to rebuild your credit in just a matter of months due to the typically short duration of such bankruptcy cases.

Still wondering what happens to your credit when you file bankruptcy? Take a look at Chapter 7 bankruptcies.

Chapter 7 Bankruptcy

A Chapter 7 bankruptcy will remain on your credit report for up to ten years. Furthermore, because any debts associated with this type of bankruptcy are discharged within just a few months of filing, they should fall off the report a couple of years before the bankruptcy itself. Generally, discharged debt comes off your credit report after seven years.

Essentially, as the items on your report associated with the bankruptcy grow older, they will have less and less of an impact on your credit score. This might also speak to the timeliness of filing for bankruptcy (as opposed to allowing collections accounts to linger and then filing later on).

FURTHER READING ON BANKRUPTCY:

How Long Do Derogatory Items Stay On Your Credit Report?

Bankruptcy

Credit Repair After Bankruptcy

Have you asked yourself, “What happens to your credit when you file bankruptcy?” Go Clean Credit offers effective services to bring your credit score back up. Contact us today!


No matter what your situation, Go Clean Credit has a solution. We have many credit repair programs that are available to help you overcome your credit situation and place you back on the path to financial success. Real credit restoration is not a once size fits all model and we tailor your needs to the right program, but most people can start for just $99 per month.

We have fixed price programs that get you back on track in as little as 5 months, debt resolution solutions, programs geared toward people who have had recent short sales or foreclosures and many others. Help is just a free phone call away, or you can fill out an appointment request. Contact Go Clean Credit to schedule a free consultation today.