Filing for bankruptcy won’t prevent you from ever buying a house. There are some waiting periods to be aware of though. It’s also important that you start to rebuild your credit as soon as you can. A Bergen County Chapter 7 bankruptcy lawyer can tell you more about how this all works.
Is There a Waiting Time to Buy a House After Bankruptcy?
You usually need to wait a certain amount of time after filing for bankruptcy before any lenders will work with you. This includes private lenders and purveyors of government-backed loans, but there are some different rules for each of them.
When it comes to conventional loans, the waiting time is usually around four years. Someone who files for Chapter 7 bankruptcy often has to wait four years from the time that their bankruptcy has been discharged or dismissed. Chapter 13 bankruptcy filers also have to wait. The four-year timer starts ticking from the date you filed, but you may also be required to wait until two years from your dismissal date. It’s a good idea to talk to a lawyer about your specific situation if you have questions.
How Can I Rebuild Credit After Bankruptcy?
Bankruptcy will stay on your credit report for a long time, but that doesn’t mean that you cannot start rebuilding your credit and doing everything possible to make yourself more attractive to a potential mortgage lender. You should:
- Avoid taking on any large debts
- Make all payments on time
- Use credit when you can and pay off your bill right away each month
Your score will begin to tick up and by the time you can get a loan to buy a house, your terms will be just a bit more favorable.
Are There Better House Loan Options For People Who Have Gone Through Bankruptcy?
There are also loans other than private, conventional mortgages. Some of them might be a better option for someone who has filed for bankruptcy in the past. Some options to consider include:
USDA loans: The United States Department of Agriculture can give bankruptcy filers loans three years after their Chapter 7 case has been completed or one year after a Chapter 13 case has ended.
FHA or VA loan: A Chapter 7 filer could qualify for a loan from the Federal Housing Administration or Veterans Affairs within two years of a discharge or dismissal. A Chapter 13 filer just needs to have their case dismissed or discharged before they apply.
Talk to Our Bankruptcy Attorneys
So if you’re thinking about filing for bankruptcy, contact the Law Office of Boyd & Squitieri. We can help you figure out if this is the right option for you. The sooner you file, the sooner you get a fresh financial start, and the sooner you can get a mortgage of your own.