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Can I Buy A House After Bankruptcy?

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Most of us have heard of at least one friend or family member purchasing a house at some point during the last year or so. While the U.S. entered 2021 with pandemic fatigue, the first several months of the year have continued to reflect rapid growth in house prices. And while the rapid growth of housing purchases last year led to bidding wars and supercharged real-estate markets across the country which hasn’t slowed down despite some publicly reporting issues with their hasty purchases, everyone hasn’t participated in this boom. With so much talk about homeownership these days, those who are either actively in the process of bankruptcy proceedings or who are thinking about filing may be wondering how purchasing a house could potentially work after bankruptcy.

Buying a House After Bankruptcy

If you have already gone through the bankruptcy process or have filed for bankruptcy, then it may feel like the odds of buying a home are stacked against you. The good news is that it is in fact possible to buy a house after bankruptcy. However, it is also important to know that purchasing a home after bankruptcy will require extra patience and special financial planning. Understand that buying a house after bankruptcy will likely mean:

  • Waiting a few years after bankruptcy before your application will be considered by a mortgage lender
  • Keeping a continuously close eye on your credit report for errors, such as a credit issue that you resolved but that is not reflected in your report.
  • Needing to provide documentation to the mortgage lender of the circumstances that led to your bankruptcy

Is Taking on a Mortgage After Bankruptcy Financially Responsible?

The idea of taking on any debt following a bankruptcy and the discharge of that can be a scary prospect. After all, anyone who has found themselves successfully on the other side of the bankruptcy process and the challenges that come along with it may understandably be hesitant about committing to new debt, even if the desire for homeownership is strong. The reality is that some purchases, like those charged to a credit card, can quickly spiral out of control if there is no plan in place to pay it off. A mortgage is, in contrast, a planned purchase that has a set term end date and requires structured payments. In terms of debts, purchasing a house at the right time can actually be beneficial for your credit and includes you gaining a substantial asset.

We Can Help You Take Steps Toward the Future You Want

We have already established that buying a house after bankruptcy is in fact achievable, but we also have to establish how to successfully overcome debt through bankruptcy in the first place. While you may dream of owning a home one day, currently facing mounting debt that you don’t see a way out of can feel like a nightmare. As the Plantation bankruptcy attorneys at Nowack & Olson, PLLC, we can carefully review your case before helping you decide which type of bankruptcy you should file or whether you should instead pursue alternative debt relief options. If bankruptcy is the right choice, we can help you position yourself to re-emerge from bankruptcy in a place where you can prepare to become a homeowner and have a better financial future in general. The initial consultation is free so contact us today to begin discussing how bankruptcy may be the solution for your financial burden.

Resources:

realestate.usnews.com/real-estate/articles/what-to-expect-from-the-housing-market-in-2021

wsj.com/articles/these-people-rushed-to-buy-homes-during-covid-now-they-regret-it-11613062856

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