Bankruptcy Lawyer Bryan W. Stone answers the question: “Can I keep my house if I file bankruptcy?”
Many debtors are concerned about how filing for bankruptcy would affect their chances of buying a house. Contrary to popular belief, assuming you would otherwise qualify, you will not have to wait a decade after a bankruptcy filing before you can buy a house. However, there are several things to do when purchasing a home post-bankruptcy.
If you have not done so already, you should start rebuilding your credit score after discharging debt through bankruptcy. Rebuilding your credit can take a while, but it is an essential part of buying a house after bankruptcy.
#2 Pay Bills on Time
The worst thing you can do after filing for bankruptcy is to start accumulating new debt or miss payments. Failure to pay bills on time and incurring new debts post-bankruptcy will negatively affect your credit score. It will impact your chances of buying a house because lenders will scrutinize your financial situation.
#3 Review Your Credit Report
If you filed for bankruptcy, much or all of your debt has been discharged. However, you still need to review your credit report to ensure that it properly reflects the filing and that no incorrect or discharged items show up on the report.
#4 Save Money for a Down Payment
After filing for bankruptcy, you need to be very diligent about your spending. You need to save money for a down payment. Otherwise, you may not be able to purchase a home.
#5 Look for a House You Can Afford
You need to set up realistic expectations when looking for houses to buy. Keep in mind that you have just filed for bankruptcy, so purchasing a house you cannot afford would not be a smart move. Keep in mind: If you need a bigger house after your financial situation improves, you can always upgrade your smaller home.
#6 Consider an FHA/VA Loan
Conventional mortgages typically require homebuyers to wait four years from the date of their bankruptcy discharge. If you need to buy a house sooner, consider a Federal Housing Administration (FHA) or a Department of Veterans Affairs (VA) home loan.
With these two loans, a homebuyer must wait only two years from the date of the bankruptcy discharge.
#7 Compare Different Lenders
When looking for a house post-bankruptcy, you need to be smart about the choice of a lender. Nowadays, there are more lenders than you can count, which is why you will need to compare different lenders to find the best one based on eligibility requirements such as:
- Years after a bankruptcy filing
- Minimum credit score
- Down payment
- Interest rate
Keep in mind that lenders will perform a hard inquiry on your credit every time you apply for a loan or mortgage. Hard inquiries are not very good for your credit score, which is why you do not want to apply for multiple loans at once.
If you are still struggling with significant debt and dealing with debt collectors harassing you, do not hesitate to schedule a consultation with our experienced bankruptcy attorneys at Arnold & Smith, PLLC. Speak with our Charlotte bankruptcy lawyer to discuss your unique situation and determine how filing for bankruptcy will impact your ability to buy a house. Schedule a consultation with our attorneys to determine your best option and help you navigate the legal process. Get a phone or video consultation by calling at (704) 370-2828 to speak with our detail-oriented and well-versed lawyers, or fill out our contact form. Now taking cases throughout North Carolina with offices in Uptown Charlotte, Mooresville and Monroe.
See Our Related Video from our YouTube channel:
See Our Related Blog Posts: