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I can't pay my house and will be going into forclousure?
My question is should I settle my debt too while I am at it, or would this ruin my credit even allot more, I am thinking if foreclosure ruins your credit then why pay the whole amount that you owe if you can settle to pay like half of it or would this defenetly ruin my credit
2 Answers
- ReenaLv 71 decade agoFavorite Answer
These are two different things.
Your mortgage is considered a secured loan because the house will be taken from you and sold if you default.
Your credit card debt is unsecured debt and can only be discharged in Bankruptcy.
A foreclosure will ruin your credit. But if you are current on your credit cards then you don't automatically lose the existing accounts and those cards can help you to re-establish your credit score faster.
Lose both house and credit cards... and you are looking at about 7 years of not being able to get any type of credit.
- Genuine GuidanceLv 71 decade ago
Your house going into foreclosure has no bearing on your unsecured debt.
Foreclosure will take the collateral which is the house. Your credit card debt is uncollateralized, so they do not come and take anything. They just basically ruin your credit rating if you pay late or not at all.
Are you thinking of bankruptcy perhaps?
