Owning a home is possible after Chapter 13 bankruptcy
As of 2017, about one-third of all bankruptcies filed are Chapter 13. This type of plan allows people who meet certain debt limits to pay off the amount they owe to creditors over an extended time period. While bankruptcy may make it easier to pay off debts, it could make renting or purchasing a home in Florida more challenging.
Landlords typically review the credit history as well as the rental history for every applicant. Seeing that a prospective tenant is in bankruptcy might make an owner hesitant to offer a rental unit. Families may improve their chances of finding safe and affordable housing by supplying letters of recommendation from current landlords or even photos of their previous well-kept homes.
The repayment period for Chapter 13 bankruptcy lasts between three and five years. However, that doesn’t mean someone going through the process won’t be able to purchase a new home. Federal Housing Administration guidelines allow buyers currently in a Chapter 13 payment agreement to purchase a home under certain conditions. The buyer must have made all of their payments on time for at least one year and have permission from the court to get a new mortgage.
Those who have a stable income but more debt than they can reasonably manage to repay may benefit from Chapter 13 bankruptcy, otherwise known as the wage-earner plan. A bankruptcy lawyer might help a client determine if this is the best option to help resolve their financial challenges so that they can get a fresh start and possibly afford a home in the future. By setting up a repayment agreement though the courts, people who once held overwhelming debt may be able to make their payments on time without the stress of creditor harassment.