While filing for bankruptcy, you might wonder if you can actually buy a new property, a home. The question is valid and the answer is yes, you can. There are hundreds of people who have successfully bought houses after getting a bankruptcy discharge. Having said that, our Pittsburgh bankruptcy lawyer thinks that there are certain things that you need to consider when you are planning to buy a home while filing for bankruptcy.Rebuilding Credit After Bankruptcy
You are filing for bankruptcy with the purpose of eliminating most of your debts. These debts can include medical bills, credit card bills, business debts, personal loans, social security, over-payments, past due rent, accounts of a collection agency, judgment from civil court including fraudulent activities. Keep in mind that bankruptcy is supposed to help you deal with your financial burden, not as a punishment on your finances even in the future. And that is why our Pittsburgh bankruptcy lawyer thinks that it is possible to build good credit after your bankruptcy discharge.
When you are buying a home, you are surely going for a loan. The bank or the lender will review your credit history. Hence, it is imperative that you work on your credit after a bankruptcy to get the loan. If you are filing for bankruptcy, the majority of your debts are going to be eliminated. Hence, you will get a chance to make consistent payments of utility bills, credit card bills, and so on. You will start seeing improvement quickly. Just make sure that your payments are all on time and that will make your credit history good.When Can You Get a Home Loan After You File for Bankruptcy
The Chapter 7 bankruptcy stays in your record for 10 years and chapter 13 for 7 years. The general idea is that you need to wait 10 years for getting a loan after bankruptcy. This is not true.
Traditionally, you will have to wait, after filing for chapter 7, for two years to get an FHA loan. However, you can get a shorter turnaround too. You can get a loan in even one year from Federal Housing Administration after your bankruptcy discharge. For that, you need to take care of the following:
- You need to prove that the bankruptcy was caused by some circumstances beyond your control like a medical emergency
- You have to prove that your earning has been reduced for 20% in last six months
- You have to vouch that the circumstances that led to filing for bankruptcy will never happen again
If you are filing for chapter 13, then you have to show the record of regular repayments for at least one year since the time you filed for bankruptcy. However, to get a loan for this case, you will also need approval from the court.Waiting for Bankruptcy Getting Discharged
One thing you must know is that you have to wait till the time your bankruptcy gets discharged. Unless you obtain special permission from the court like the case of chapter 13, you cannot apply for any loan in the future.
At this point, it is necessary that you hire an efficient Pittsburgh bankruptcy lawyer so that there remains no mistake from your end for filing bankruptcy. To get more details, you need to get in touch with us right away at Pittsburgh Bankruptcy Law Group.