After a bankruptcy, is buying a home a possibility?
People who file for bankruptcy are often concerned about the implications for their future, and many want to know whether they will ever again be able to secure a home loan.
While a bankruptcy does damage your credit score, which is a major part of your application for a mortgage, filing for personal bankruptcy is meant to be a fresh start for individuals who are struggling with severe debt. With patience and fiscal responsibility, that fresh start can one day include home ownership.
After filing for Chapter 7 bankruptcy, it can take 10 years for the information to clear from your credit report. If you file for Chapter 13, bankruptcy information is removed from your report after seven years.
According to Credit.com, after filing for bankruptcy, you should spend about 24 months trying to boost your credit score. The quickest way to accomplish this is to focus on good management of your finances and pay your bills on time. This will make your application for a home loan look more favorable as banks want to see that you have moved on from debt and learned from the past.
Debt and bankruptcy may feel like a problem with no end in site. But the sooner you contact a lawyer about getting started on filing for personal bankruptcy, the closer you will be to putting this tumultuous time in your past and moving on to better days, including one day owning a home.
Source: Credit.com, “5 steps to buying a home after bankruptcy,” Gene Melchionne, May 8, 2015