After going through bankruptcy, you might feel as if you will never again qualify for the financing needed for the things that many people take for granted, like buying a house. Even getting a traditional credit card might seem out of reach. In reality, you are not doomed to have a bleak financial future!
A bankruptcy does not stay on your credit report forever. Slowly but surely, by setting up and sticking to sound financial management practices, you can rebuild your credit. A Georgia bankruptcy attorney can steer you in the right direction and answer your question of whether you can buy a house after bankruptcy.
Home-Buying after a Chapter 7 Bankruptcy
In Chapter 7 bankruptcy, the court lets you walk away from all of your qualifying debts. Because you do not repay those debts, a Chapter 7 bankruptcy, which is the most common type of bankruptcy, does not cause as much damage to your credit as you might think. In fact, in most cases, credit scores go up soon after bankruptcy because the delinquent debt is removed through bankruptcy.
How soon you qualify for a home loan after bankruptcy depends on how low your credit score was before you filed bankruptcy. If you have a low credit score before you file for bankruptcy, as most do, your credit will take a little time to improve. But keep in mind, your credit starts improving the day you file for bankruptcy! But, to get to the point you qualify for good loan terms may take anywhere from 4 months to a couple of years. Again, it depends on what your score was before you filed for bankruptcy.
Home-Buying After a Chapter 13 Bankruptcy
A Chapter 13 bankruptcy does not hurt your credit as much because you pay all or some of your debts through a schedule of payments. Also, you get to keep your assets with Chapter 13. Your credit score is unlikely to tumble as far down as it would have with a Chapter 7 bankruptcy. So you may qualify for a loan sooner than you think. Remember, you can apply with different lenders so you get an idea of what terms you qualify for.
Contact our Georgia bankruptcy attorney today. A Georgia bankruptcy attorney can provide guidance for you on rebuilding your financial life after bankruptcy.
Posted in: Bankruptcy