Can You Buy a House After Filing Bankruptcy?
For many people, the idea of filing bankruptcy sounds like a last ditch solution, like pushing the self-destruct button on your own finances to avoid a larger catastrophe. For those same people, one of the major pieces of collateral damage that result from filing bankruptcy is that they will never be able to buy a house as a result.
At RGG Law, our bankruptcy lawyers and attorneys are here to assure you that this is not the case. Even if you are in the middle of filing bankruptcy and feeling the pressure just know that, eventually, you will be able to buy a house once the smoke has cleared. This blog is just general guidance, contact us if you would like to discuss your specific case.
Wait It Out
Patience is a virtue when it comes to bankruptcy procedures. Depending on which type of bankruptcy you file for – Chapter 7 or Chapter 13 – you are going to be waiting different lengths of time, but you are going to be doing a lot of waiting. When it comes to recovery, the patience you learn during the process is going to come in handy.
In the time after bankruptcy, once your payments are made and depending on which option you choose, you will be able to build up your credit again. As we have explained before, bankruptcy can stay on your credit report for up to a decade, but you will be able to buy a house before that. With the right representation, you can still secure a home loan and a mortgage, but you will need time to take stock of your finances and let things settle first.
Save Your Money
We frequently advise clients filing bankruptcy to see it as an opportunity to reassess the way they organize their finances. Although it is dramatic, bankruptcy can give you the chance to start over in terms of how you plan your budgets. Take stock of what you have and what you no longer have, and examine how your finances slipped from your control and you ended up having to file.
Forming new habits in spending and saving can be surprisingly easy, especially after the resolution of a bankruptcy case and with the help of a bankruptcy law firm like RGG Law. Just remember our above advice to take things slowly and not expect immediate results.
Check Your Credit Report
When your savings are building up again, you should also start to regularly check your credit report. While you should avoid checking it obsessively, you can use it as a metric to check your progress as time goes on. Seeing the report improve through good financial habits and saving will also go a long way to improving the way you manage your money.
You should also see this as an opportunity to check for incorrect records or entries on your credit report, and to do some general maintenance on outdated information that most people never do at all. Finding out how to correct credit information will also help you understand how it is assessed.
Plan Your Next Move
Even when your bankruptcy case is expunged from your credit report and the time finally comes when you are ready to buy your new home, you should still be patient. Plan your purchase in detail, shop around for a mortgage, assess what you can afford in terms of closing costs, mortgage payments, work that may need to be done on the house, and anything else you can think of.
You will need to avoid becoming overwhelmed again, and the best way to do so is to know what to expect. Discuss your options openly and honestly with a realtor, as well as mortgage advisors and financial advisors.
Filing Bankruptcy and Recovering
As you can see, you still have options available to you in the future, even if filing bankruptcy feels like a desperate option right now. With good planning, smart budgeting and staying calm, as well as the guidance of bankruptcy lawyers and bankruptcy attorneys like ours, you can get your life back. If you are considering your options or need more detailed information, contact RGG Law for a free bankruptcy consultation today.