Purchasing a Home after You Declare Chapter 13 Bankruptcy
Many people fear that bankruptcy will make it impossible for them to ever own a home again. This simply isn’t true.
First of all, many people who are eligible for a Chapter 13 bankruptcy can keep the home that they are in now. This is what Chapter 13 debt reorganization is designed to do. You pay what you can to other creditors while making mortgage payments, and when the process is over, most of your other debts are gone, leaving you with more money each month to put towards your mortgage or home loan.
Secondly, many types of loans can be granted after short waiting periods. Federal Housing Administration (FHA) loans and Veterans Affairs (VA) loans are available with a court’s approval after you have completed one year of payments under a Chapter 13 agreement. In order to be eligible for these loans, you will need to meet certain criteria and give an explanation for your bankruptcy filing.
Loans through the United States Department of Agriculture can also be obtained after a year of Chapter 13 payments. Alternatively, this type of loan is available one year after your Chapter 13 discharge is granted. These loans are intended to help low-income families in rural areas and are not available to all people.
Conventional loans, which are not guaranteed by government programs, are available two years after you receive a debt discharge under Chapter 13. If your Chapter 13 filing is dismissed without resulting in a debt discharge, the waiting period for a conventional loan will be extended to four years from when the case was dismissed.
Regular mortgages are also a possibility. In order to get a mortgage, you will need to convince a bank that you are reliable by building your credit back up. Luckily, debt reorganization is great starting point for building your credit back up.
Once you complete your payment plan, you will have nearly a fresh start when it comes to all of your financial decisions. By making wise choices and paying attention to your economic choices, you can rebuild your credit. While your credit score may suffer when you file, the consistent payments you make and the responsibility you show afterwards will soon be reflected in your credit history.
When you contact DebtStoppers in Atlanta, our team will work closely with you to decide on the course of action that best helps you deal with your current financial problems and plan for the future. Our attorneys will meet with you for free to advise you of your options. To schedule a no-cost, no-obligation consultation, contact us online or call us at 404-796-7161.