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How Long Will a Short Sale, Foreclosure, or Bankruptcy Affect Your Credit

December 12, 2009


Question: How long will a foreclosure or bankruptcy show up on your credit report?

Answer: A foreclosure can be reported on your credit report for seven years from the date the foreclosure was filed in the court.

Bankruptcy, legally can remain for 10 years from the date you filed – not the date of discharge or when the bankruptcy is completed. However, credit reporting agencies have agreed to voluntarily remove completed Chapter 13 filings – where someone pays off part or all of their debt under a court-supervised plan – seven years from the date of filing.

The idea is to give consumers some credit for having paid back as much of their debt as they could afford to pay back.

What happens with a short sale? Or an arrangement in which the lender allows the homeowner to sell the home for less than the mortgage due? A short sale may be listed as a charge-off or a debt settled for less than the full balance, however, if you work with an agent who is an experienced short sale specialist they should be able to negotiate with the bank and get them to agree to accept the shorted balance as payment in full. Both a charge-off and a debt settled for less than the full balance remain on your credit report for seven years from the date that action occurred, however, the affect to one’s credit score is far less devastating than a foreclosure and individuals who are proactive in attempting to restore their scores are usually able to significantly improve their scores in approximately 18 months.

If you’re facing foreclosure you’re facing some very important decisions. We want you know you’re not alone and we are here to help with any questions you may have to assist you in making the best decisions for your situation. There is no charge for this service and we are happy to help! We offer confidential and professional real estate advice.

The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in;  Bexley  Columbus  Delaware  Downtown  Dublin  Gahanna  Grandview Heights  Granville  Grove City  Groveport  Hilliard  Lewis Center  New Albany  Pickerington  Polaris  Powell   Upper Arlington  Westerville  Worthington


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