<br/><br/>Homeowners do not choose to become financially distressed, but many choose to enter foreclosure for lack of a much better alternative. Weeks turn into months of back payments and without action from the homeowner, the bank will require steps to put a foreclosure notice on the property. Do not be caught unawares. People should avoid foreclosure!! without exceptions, but many choose this action because they don't understand the real implication that a foreclosure holds in your financial future.<br/><br/>This short article details the reasons that one should Avoid Foreclosure - NJ Short Sale Source prevent foreclosure and what can be done to curb the process.<br/><br/>What's Foreclosure?<br/><br/>In legal terms a foreclosure is when a piece of property is taking by the bank due to lack of payment on the homeowner's part. This process doesn't happen overnight. By state law the lender has to provide the homeowner proper time and notifications before they're legally in a position to proceed with the foreclosure.<br/><br/>The procedure normally starts with an easy Notice of Default. When you have missed a specific number of payments the lender will file a public Notice of Default which states that if the payments aren't trapped they will begin the foreclosure process. Some states usually takes nine months to annually to have the entire process, and then other states are done in under six months. Regardless of the period of time is necessary by your state law it is very important to get moving with the prevention process as soon as you are able to. Lenders are much prone to tune in to a homeowner, and more willing to utilize them, if the foreclosure process has already started.<br/><br/>Reasons Foreclosures are Bad<br/><br/>1. Sometimes cause bankruptcy - Even once you re-locate of your house the consequences of foreclosure do not stop. The lender has got the legal right ahead after any debt that is owed, including legal cost or if your house comes at a loss. As an example in the event that you owed $250,000 for your house and the lender was only able to offer it for $150,000, you would still owe the bank one other $100,000. This money can follow you around for several years, and sometimes decades, and can occasionally even end up in your wages being garnished. After this happens many homeowners will file bankruptcy due to the financial problems which they suffer consequently the foreclosure.<br/><br/>2. Credit rating falls - You will see a fall in credit score from 50-200 points after a foreclosure depending on the exact situation. It will also remain on your credit score so even following the score went back up it will still cause red flags to increase and thus which makes it harder to create major purchases.