How to Buy a House After Bankruptcy

Are you thinking about filing for bankruptcy? Or have you recently filed for bankruptcy or received a discharge? The answer to these questions can become more complex when you are also thinking about your options for buying a house. Whether you are a first-time homebuyer or you have owned a home in the past—even if the house has been at risk of or has gone into foreclosure—the most important thing to know is that you can be eligible to buy a house after bankruptcy. To be clear, filing for bankruptcy and receiving a discharge does not mean that you will never be able to buy a house. While you will need to learn about certain waiting periods and rebuilding your credit, you should be hopeful about home ownership following your bankruptcy case.

A recent article in House Digest discusses the ins and outs of buying a house after filing for bankruptcy, and our Oak Park bankruptcy lawyers want to provide you with more information.

Know Bankruptcy Will Impact Your Credit But Will Not Prevent You from Buying a House in the Future

If you are planning to file for bankruptcy, it is important to know that it will impact your credit. However, many people hear myths about bankruptcy and wrongly believe that a bankruptcy case will permanently destroy their credit. While your credit will affect your credit, you will be able to rebuild your credit after your bankruptcy discharge.

In fact, if you want to buy a home after bankruptcy, you should begin looking into options for rebuilding your credit after your discharge. You may need to apply for a secured credit card, but soon you may be eligible for an unsecured credit card. It is critical to use the card regularly and to repay the balance in full each month. As time goes on, you will be eligible for additional credit and can rebuild your credit profile and credit score.

Know About the Waiting Times for Home Buying After a Bankruptcy

You should know that different types of bankruptcy and different types of mortgages will impact the amount of time you have to wait from your bankruptcy case to seeking a mortgage again. For some types of bankruptcies and mortgages, you could be eligible to buy a home just one or two years after your bankruptcy discharge. For other types of bankruptcy cases and loan types, you may need to wait longer.

For example, following a Chapter 13 discharge, you may be eligible for a Federal Housing Administration (FHA) loan just one year after filing for bankruptcy. Debtors who file for Chapter 7 bankruptcy can be eligible for an FHA loan two years following their discharge. Veterans Administration (VA) loans often have a two-year waiting period. Conventional loans may require a longer waiting period, from two to four years, depending upon the particular circumstances. To determine your specific waiting period, you should speak with a lawyer.

Contact Bankruptcy Attorney in Oak Park

Whether you have general questions about the bankruptcy process or you need help with questions about bankruptcy and home ownership, one of our experienced Oak Park consumer bankruptcy attorneys can speak with you today. Do not hesitate to reach out to us to learn more about the legal services we provide to consumers in Illinois. Contact the Emerson Law Firm to ask your questions and find out about your options.

See Related Blog Posts:

Learning About Recent Consumer Bankruptcy Trends

Get an Overview of Consumer Bankruptcy

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