Bloomington Bankruptcy Lawyer Answers Readers’ Questions About Buying New Homes After Bankruptcy

June 6, 2012 10:38 pm Published by

If there’s one topic I get more questions about than any other, I think I’d have to say “homes”. 

Visitors to the Zuckerberg bankruptcy law offices always have concerns about their houses or apartments, and readers of these Bankruptcy in Indiana articles write in questions about homes as well.

I decided it would be a good idea to devote an article to giving answers to some of the latest reader questions about keeping homes, selling homes, renting homes, and buying homes – before and after filing personal bankruptcy in Indiana.

Question One:  I had to give up my home as part of my bankruptcy.  How long will I have to wait before I can qualify to buy a new home?

After more than twenty five years as a debt consolidation lawyer, I know that different lenders often make different decisions based on the same set of facts.  Generally speaking, two years after a bankruptcy, you should be able to qualify for a mortgage (assuming you’re managing your finances well and have sufficient income to support the payments). You might even be able to qualify sooner with a bigger down payment. The availability of credit might differ depending on whether you’re applying for an FHA or VA loan or a loan through a private bank.

Also, a lot depends on whether you filed under Chapter 13 bankruptcy law, or filed bankruptcy    Chapter 7.  (If you didn’t have enough money to pay your debts, how would you explain having enough for a down payment on a new mortgage now?)   Based on my conversations with mortgage bankers and realtors, the main idea here is that, if your job situation has stabilized, and you can explain how you’ve rebuilt your credit after emerging from personal bankruptcy in Indiana, that’s going to be more important to a lender than any arbitrary time frame.


Question Two:: It’s been three years since I filed bankruptcy. I was able to keep my home and now I’d like to refinance, with interest rates being so low.    What are my odds of being even considered? (I’d like to avoid the embarrassment of being turned down automatically.)

“It’s not a question of time,” says one mortgage banker in Wiki.answers. “If you qualify, you could buy a house the day after discharge.” It all depends on your credit score, income, and trustee rating (if you filed under Chapter 13 bankruptcy law, the bankruptcy trustee would need to approve any transaction). 

One of the biggest worries clients have is that once they’ve filed personal bankruptcy in Indiana, years will go by before they’re able to obtain credit again. As I’ve often assured Bankruptcy in Indiana readers, a report from the Consumer Bankruptcy Project reveals the opposite is the case.  Nearly every debtor receives credit offers shortly after filing bankruptcy, and while most of those come from credit card companies, some are for car loans and even mortgage loans.



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This post was written by Mark Zuckerberg

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