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How to Recover from Foreclosure in Pennsylvania

Losing your home is not the only negative consequence of mortgage foreclosure: your credit score might drop by 100 points if the bank takes your case.

Credit scores typically take a long time to improve after foreclosure proceedings, which remain on credit reports for about seven years. Rebuilding your credit after foreclosure is difficult, especially if you must find a new place to live and have other expenses or creditors to satisfy. While bankruptcy also affects credit, the recovery process is often more manageable, as debtors can rebuild credit while remaining in their homes. Before your credit score improves, you might be denied new mortgages or credit cards, and our lawyers can help you avoid such stress by identifying your way out of foreclosure, whether that is by defending your case in court, renegotiating the contract with your lender, or filing for bankruptcy in Pennsylvania.

Call Young, Marr, Mallis & Associates at (215) 701-6519 to get a free case review from our Pennsylvania mortgage foreclosure defense lawyers today.

How to Recover from Mortgage Foreclosure and Mitigate its Effects in Pennsylvania

If your lender successfully takes your home through foreclosure, your credit score might drop by 100 points or more after already suffering because of missed mortgage payments. While you can improve your credit score after foreclosure, its negative effects may linger, impacting your ability to find new housing, which is why our lawyers will prioritize you keeping your home despite facing foreclosure.

Make a Plan to Improve Your Credit Score

If foreclosure goes through, you may have to find a new place to live, and banks or landlords will likely consider your credit score when evaluating you as a prospective buyer or tenant. Unfortunately, foreclosures severely affect credit scores, so planning to improve your credit afterward is important. An alternative to foreclosure is bankruptcy, which similarly affects credit scores. That said, bankruptcy requires debtors to first take credit counseling courses before filing and lets debtors keep their homes, meaning they will not have to seek new housing. If you were to lose your home and apply for a new loan or an apartment lease, your credit might be under considerable scrutiny.

Missing mortgage payments will adversely affect your credit, so you might already face credit issues before foreclosure. These issues can prevent you from improving your credit since you may be denied requests to open new credit cards, which is typically how people build credit: by paying their credit cards off on time. When preparing your case, whether we identify a defense against foreclosure or file a bankruptcy petition, we can review your financial situation and help you identify how you can work to better your credit score after your case is resolved.

Prioritize Keeping Your Home and Stopping the Sheriff’s Sale

The primary consequence of mortgage foreclosure is not necessarily the impact on one’s credit but the fact that they lose their primary residence. Mortgage foreclosure can make it difficult for individuals to find new housing, get a new loan, open new credit cards, and rebuild their financial stability. Throughout your case, our attorneys can prioritize maintaining ownership of your home. There are many routes to resolving foreclosure proceedings without sheriff’s sales, and our Pennsylvania mortgage foreclosure defense lawyers may begin by approaching your lender with alternative loan terms that convince them not to continue with the case. Many lenders are open to renegotiating mortgage contracts, which might save them time and resources associated with judicial foreclosure proceedings.

Bankruptcy can help you avoid some of the long-term consequences associated with foreclosure, as it provides a pathway to addressing all debt, not just mortgage debt. If you cannot make your current mortgage payments, you might also have difficulty paying off credit cards or car loans, and bankruptcy can help you address those debts. In fact, bankruptcy might erase some of them, like credit card or medical debt, giving you the relief you need to focus on repaying your mortgage lender while remaining in the home.

How Long Will Your Credit Score Take to Recover from Foreclosure in Pennsylvania?

Generally speaking, mortgage foreclosures remain on credit reports for seven years in Pennsylvania, meaning any future lender or creditor can see them during that period. Though that does not mean it will necessarily take that long for your credit score to recover, it does emphasize the importance of finding a solution to foreclosure for homeowners.

The most traditional way to build credit is by opening a credit card and paying it off on time. Reassessing your finances and being intentional about the purchases you make moving forward can help you steadily rebuild your credit over time. If you have other loan payments or financial responsibilities that threaten your ability to rebuild your credit after foreclosure, our lawyers can help you address them during bankruptcy, which can also put a stop to foreclosure proceedings because of the automatic stay it affords most debtors.

Most people cannot afford the time it takes to substantially improve their credit after foreclosure while also having to find a new place to live that is within their current budget. Recovering from a major financial event like foreclosure is typically a years-long process, during which people might face future issues with other creditors they may have. Because of the difficulties associated with making meaningful improvements to your credit after foreclosure, it is important to prioritize your case and take your lender seriously if they have notified you they intend to proceed with foreclosure. If you do not respond promptly, your case might proceed uncontested, leaving you with a poor credit score and without a place to live sooner than you anticipated.