During the Foreclosure

• The foreclosure process lasts from three to nine months. This is from the first missed payment to the auction sale of the home. During this time homeowners can typically work with the lender to keep their home. If keeping the home is not an option, the homeowner should prepare for life after the foreclosure. If possible, individuals should use the pre-foreclosure period as a time to save up for rental and utility deposits they will need for their new home.
  
  

Rebuilding Credit Score

• After a foreclosure you can expect a significant drop in credit score. The goal after a foreclosure is to raise the score as quickly as possible. It is important to remain current on all monthly payments not just credit cards. This is because rental companies, utilities and insurance companies send reports to the credit agencies, so late payments to anyone will show up on your report and cause a decrease. Develop a budget and payment plan for paying down debt because a high debt ratio negatively affects your score. Request copies of your credit report from all three credit agencies to make sure there are no errors on your report. Report any errors immediately.
  
  

Your New Home

• In the aftermath of a foreclosure, filers can expect to pay higher than average deposit fees on apartment and home rental leases. Some large scale apartment complexes may reject applicants due to low credit scores. The ideal time to start looking is while you are still in your home. It is also beneficial to search ads online and in the local paper for private landlords, as they may be more lenient. The wait time for purchasing a home after a foreclosure is usually around two to three years. The amount of time depends on the state of your credit, amount of down payment and other criteria.
  
  

Other Considerations

• After a foreclosure, individuals may find it more difficult to obtain a job due to their damaged credit. If applying for a job that requires a credit check, it may be beneficial to let the employer know of your situation up front. Due to the increases in foreclosures, employers have become more forgiving. There is also a risk that you may owe taxes on the amount that was not recouped by the bank during the foreclosure. This is because the IRS considers the amount not paid as income to you. Recent laws decrease the risk of this happening; however, there is no guarantee this tax forgiveness will continue.