What Happens After Foreclosure

A foreclosure is one of the most heart-wrenching processes one can go through. In brief, a person who is going through this process will see most of his assets sold, till either his debts are cleared, or he has run out of assets.

Handling The Aftermath

It is really very hard to decide which is worse: bankruptcy or foreclosure. But to overcome a foreclosure, as is the case with bankruptcy, you need to take a lot of very quick steps. So what happens is that you are left with practically no assets. Your car, you house, everything gets sold off. The other consequence is that your credit score plummets and hence lenders aren't too willing to give you a loan. So let us learn to tackle each of these problems one by one.

Redemption Period
An interesting clause law, which somehow a lot of people miss, is the one related to the redemption period of the foreclosure. This means that if you do have to sell your house, the state laws grant you a time frame to arrange funds to buy your house back from the party that purchased it during the foreclosure process. You have to pay the auction price to the purchasing party and you can claim your house back. Unfortunately, not all states grant a redemption period, and there is no uniform redemption period either. But here are some of the states that do grant this facility and the redemption period for these states is given below.

State	Redemption Period
Alabama	1 Year
Alaska	1 Year
Arkansas	1 Year
Arizona	30 - 180 days
California	1 Year
Connecticut	As defined by the Court Decree
Idaho	1 Year
Illinois	3 months
Iowa	20 days
Kansas	1 Year
Kentucky	1 Year
Maine	3 months
Maryland	As defined by the Court Decree
Michigan	1 month
Minnesota	6 months
Missouri	1 year
New Jersey	10 days
New Mexico	30 days
North Dakota	6 months to 1 year
Oregon	6 months
South Dakota	1 month to 1 year
Tennessee	730 days
Utah	As defined by the Court Decree
Vermont	6 months to 1 year
Wisconsin	1 year
Wyoming	3 months to 1 year

Do Not Wait to be Evicted
A lot of people will tell you that you can stay in your house till the new homeowner evicts you by initiating a legal procedure. This, in my opinion, is a bad idea. With an eviction, you not only lose face in society, but also get blacklisted for having been evicted once. A foreclosure is bad enough, but a legal eviction will basically prove to society that you are not trustworthy and hence you might find it tougher to find a homeowner who is willing to rent you his house. So, once your redemption period is over, move out peacefully.

Rebuild Your Assets
The next thing you must do is rebuild your assets. This basically means that you should save money and invest it properly. Building your assets helps to improve your credit rating and also enables you to a mortgage for any loan which you might need in the future. Hence rebuilding your assets, and spending wisely are important things to do afterwards.

Improve Your Credit Score
A mark of foreclosure on your credit history never looks good. Yet a good credit score is important if you ever want to take a loan. It is well-known now that a person with a good credit score will always get a loan at a lower interest rate than a person with a lower credit score. So pay off your debts on time, build your assets and your credit score will improve, enabling you to get a cheaper loan.

I understand that a foreclosure can be mentally debilitating, but to emerge out of the experience better, you need to show immense mental strength and composure. So good luck!