The Upside of Foreclosure
Foreclosure is a bad thing right? Families being uprooted from their homes – bad. People losing their life savings when the value of their home tanks – bad. Empty homes attracting mischief – bad. Unkempt properties creating an eyesore – bad. Credit scores plummeting — bad.
Sure, all of those things are bad. No one wants to be in that situation. Heck, most people don’t even want to be living on the block where all that is happening.
It may not seem like it, but there is an upside to foreclosure. Sometimes foreclosure can be the kick in the pants you need to get your finances back on track. Let me explain how:
Foreclosures typically take a long time to process. Cook County is particularly slow. It’s not unusual for a foreclosure to take 6-12 months, sometimes even more. So how is this a good thing? Well, if you were being foreclosed, that means you already weren’t paying your mortgage for a while. So essentially, you were living rent-free. Once the foreclosure is filed, you could potentially end up with another 6-12 months rent-free. This gives you time to start getting things back in order. You can do whatever it takes to get you there – get a new job, save some money, or catch up on the payment of some of your other debt. Who knows? If all goes well, maybe you can start paying the bank again and keep your home.
Even after the foreclosure is final, you may get additional time in your home. What does that mean for you? Well, it’s more time to save. Some banks will let you stay in the home for many months while they figure out what to do next. They don’t want to end up with a vacant, unmaintained, decrepit property. At least while you’re there, you are presumably taking care of it.
So you see? There’s an upside. Whether your foreclosure was a result of a bad market, poor decision-making, or a sudden change in circumstances, you can use that “foreclosure-time” to turn things around for you. If you’re being foreclosed, try to make the best of it and think of the cup as half-full instead of half-empty.