Will I Be Able to Buy a House After My Bankruptcy?

Many individuals who have a bankruptcy discharge in their relatively recent past may think that buying a house is simply not an option. While you will not be able to buy a house when you are in the midst of bankruptcy proceedings, you can start taking certain steps to move toward a house purchase right after your bankruptcy discharge is final. The reality is that according to a Federal Reserve Bank study, consumers who filed for bankruptcy actually end up with better credit scores than those who did nothing to address their financial issues. Surprisingly, you may be able to qualify for a mortgage and buy your own home sooner than you might think.

Rebuild Your Credit Post-Bankruptcy

You are entitled to one free copy of your credit report each year from the three major credit reporting agencies, Equifax, and Experian, and TransUnion. You can access these reports by visiting AnnualCreditReport.com. Examine these reports closely for errors, and dispute them with each agency if you find errors on your reports. You also can get a free credit report summary from Credit.com. Meanwhile, show lenders that you are now a good credit risk. Take out a secured credit card, a car loan, or a student loan, as you are able to do so. Make your payments in full and on time, every month, without fail. Do not be tempted to max out your credit cards; rather, use only a small portion of the credit to which you have access and pay those debts off promptly.

Exhibit Stability in All That You Do

You want to prove to lenders that you are trustworthy, reliable, and stable. Part of doing this involves remaining at the same job for a good period of time. This is not to say that you should pass up a good job opportunity if it presents itself. However, a steady income for a prolonged period of time can be essential to improving your credit prospects.

Give Yourself Time

While you may be impatient to own a home, a bankruptcy does remain on your credit report for up to 10 years. However, it is not necessary to wait that long before applying for a mortgage. You should wait a minimum of two years before trying to buy a house. During this time period, take stock of your finances and work on continuing to improve your credit and overall financial situation. You also should anticipate major expenses that may be coming up in the near future, such as sending a child to college.

Contact an Experienced Colorado Bankruptcy Attorney for Help

Karen Kealy is well-aware of the advantages that addressing your financial problems through a bankruptcy discharge can offer. She also can give you advice about qualifying for a mortgage in light of your bankruptcy discharge. Contact our office today and set up a consultation with Karen a seasoned Loveland bankruptcy attorney, who can help you make the best decisions for your situation.