According to research from the University of Michigan, approximately 3.5 percent of homeowners have fallen behind on their mortgage payments. This means that approximately 4.1 million American families have faced financial hardships involving their home. With the anemic economic recovery, it’s estimated that approximately 2 million families could be facing foreclosure. For many circling the inevitable drain, deciding whether to file for a Dallas bankruptcy or foreclosure is a daunting task.
While both options are damaging to your financial health, determining the right choice for your situation can minimize the fallout. Regardless of whether you choose a foreclosure or to file for a Dallas bankruptcy, remember that these are only part of the solution. A long-term strategy for repairing your credit score as well as financial management should also be considered. To decide between a bankruptcy or a foreclosure, determine the:
- Urgency. If your financial predicament is urgent but temporary, your lender might be willing to help, especially if you haven’t already crossed the 90-day mark. Urgent yet temporary situations are more favorable to a forbearance period to reestablish your stability. However, if you’re financial struggles are more permanent, then filing for bankruptcy might be unavoidable.
- Long-term consequences. While a foreclosure will damage your credit score for nearly a decade, consider whether or not you will rely on credit in the future. Filing for a Chapter 13 bankruptcy, for instance, might look better to some lenders than a foreclosure. Your willingness to restructure payment through Chapter 13 is better than walking away from your property through a foreclosure.
- Homelessness. One of the consequences of a foreclosure is an eviction. If you must file for a foreclosure over bankruptcy, then ensure that you have a living plan for you and your family. Fortunately, most places allot a 3-month grace period before the eviction so you can determine you next move.