It looks like Mr Collins was answering you while I was typing my lengthy answer. And he gives you good advice as far as the legal ramifications. We are not allowed to give legal advice, so contacting an attorney regarding the terms of your foreclosure is the best advice. We in Wisconsin live in a state where the bank is allowed to come after you for the deficiency which means the difference between what they sell it for and what you owed in addition to late fees and attorney fees on their side. Having the right doesn't mean they will. If you have an attorney and that is what you are concerned with, then I would follow Mr. Collins advice.
So your original question is what type of.financial hardship will you expect? It will definitely be harder to get credit and you won't be able to buy another home for 3 years after a short sale under current rules. But if you take a few steps towards re-establishing credit you should be in good shape in a year or 2 with your credit score. I would recommending meeting with someone every year to ensure you're on track.
I personally believe, because of the magnitude of the foreclosures that have occurred in the past five years, that it will not have exactly the same ramifications that it once had. The best thing you can do right now is live within your budget and begin to repair your credit. I'm hoping that someone here on Trulia will answer you as to how to do that, such as a lender or credit repair person. However, I can tell you a couple things you can do right now.
1. Open a savings account if you don't have one. Make a deposit every month - no matter how small - ($5.00 if that's all you have).
2. If you have credit cards in good standing, keep them that way. Use one of them to charge things like groceries or gas. BUT MAKE SURE YOU HAVE THE CASH TO PAY FOR IT BEFORE YOU CHARGE IT AND PAY IT EVERY MONTH!!! ON TIME!!! Kohl's has policy where you can charge an item and pay for it AT THE REGISTER in the same transaction - a great way to build good credit.
3. Keep all current bills (rent, utilities and such) on time.
When the economy gets better (and it will get better), if you decide to purchase again in the future, most likely you will be paying a higher interest rate due to your foreclosure. In fact, you will find that in most types of purchases such as car loans and other credit. But it won't last forever. If you continue to keep the rest of your credit in A-1 shape, it will help you greatly in the future.
Hope this helps you somewhat and I wish you all the best.
RealtorsÂ® and real estate agents are not allowed to discuss legal matters or give legal advice. Sorry.
Michael Collins- SFR, BPOR
Rock Realty Wisconsin
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