How Does Foreclosure Affect a Credit Score?
Foreclosure is a grim financial issue that a person may face due to overwhelming debts or a lack of income. Whatever the cause of debt concerns or foreclosure threats, a person may need to find a solution to their foreclosure problems quickly. In part, this is due to the serious damage foreclosure can have on a person’s credit score. However, bankruptcy proceedings may be able to help with this concern.
If you are juggling finances in an attempt to keep your home safe from foreclosure, you may find relief through Chapter 7 or Chapter 13 bankruptcy. These debt solutions can help a person deal with a wide range of debt issues, sometimes protecting a person’s home from foreclosure proceedings. For more information, contact the Birmingham bankruptcy lawyers of GREENWAY BANKRUPTCY LAW, LLC, by calling (205) 324-4000.
Credit Score Changes from Foreclosure
While some debtors may think of foreclosure as a single concern, it is often a more complex problem than just the loss of a single piece of property. In many cases, people take out significant debts in an attempt to keep a house financially afloat. Eventually, this debt may prove insufficient to cover the cost of the home. However, this debt now needs to be paid off in addition to direct financial issues linked to the foreclosure.
The vicious cycle of debt that can surround a foreclosure may ultimate be the cause of several serious credit score concerns. These concerns may include the following:
- Credit score damage from excessive credit sources
- Credit score damage from unpaid or late bills
- Credit score damage from foreclosure itself
If a person does not seek bankruptcy or some other type of debt solution, they may remain incapable of paying back these loans, which will only continue to further tarnish their credit.
Bankruptcy can be a powerful tool that might help you to begin reestablishing your financial stability. Contact the Birmingham bankruptcy attorneys of GREENWAY BANKRUPTCY LAW, LLC, at (205) 324-4000 today to learn more about your options.