The setbacks of foreclosure are great. Once you lose your home, an avalanche of financial and legal woes appear. Foreclosure is a long-term stain on your credit report and your score can take years to rebuild after the process ends. Finding help in advance of the foreclosure process can help mitigate your loss.
Help
Seek help from a Housing and Urban Development-certified foreclosure counselor as soon as you receive a foreclosure notice. Counselors can help you determine solutions for keeping your home or prepare for foreclosure if there is no other option. When speaking with a foreclosure counselor, have all your loan, income and household budget information handy. Foreclosure counselors are also helpful in alerting you of your state's laws regarding mortgage deficiency judgments.
A deficiency judgment is a demand for the remaining sum on your mortgage following foreclosure. Since financial hardship is generally what leads to foreclosure, most homeowners are unable to make debt payments and afford a new home. Filing for bankruptcy is an alternative to making payments on a judgment.
Credit Report
Credit reports detail your financial relationship with your creditors. A new creditor can learn your payment history, charged off accounts and the number of credit accounts you have available through your credit score. Legal actions such as liens, judgments, foreclosure and bankruptcy also appear on your credit report. Foreclosures remain on your credit report for seven years.
Employment
While a foreclosure remains on your credit report, it may be difficult to find certain types of employment. Jobs that rely on the financial credibility of their employees such as jobs with banks, jewelry stores and credit unions, seek employees with good to excellent credit scores and a history of responsible borrowing in their credit report.
Credit Score
Your credit score can take years to rebuild following a foreclosure. According to CNN Money, your score drops between 85 points and 160 points after foreclosure. The extent to which your score drops is based on the status of your other credit accounts. If your other accounts remain in good standing with a positive payment history, impacts to your score may be lessened. Focusing on repaying remaining credit accounts on time and keeping available balances low on revolving accounts helps you rebuild your score the fastest.
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