Bankruptcy Lawyers do preciselywhat you pay them to do; file your bankruptcy papers with the state. When you are in the midst of filing for bankruptcy, you are usually more focued on keeping your home as opposed to how you will qualify for your next one so you may not discuss how the bankruptcy will affect your future mortgage prospects. Most people write it off and just assume they won’t be mortgage candidates for quite some time.
The truth is, you can becoming eligible for a home mortgage after bankruptcy but it is a process and you must take certain steps along the way. Here are some tips:
- Know that you bankruptcy will stay on your credit report for 10 years. Most bankruptcy attorneys will at least let their clients know this. The key here is to make sure you use future credit wisely as the rebuilding starts once the bankruptcy is discharged.
- Get a copy of your credit report. I would wait at least 30 if not 60 days after your bankruptcy is discharged to get a copy. You can write to each of the credit reporting agencies and request a copy of your credit report or you can use one of the online services that offers a free trial period.
You may find that some or all of the creditors that were paid in your bankruptcy are still listed on your credit report. The next thing you should do is draft a letter to each individual credit bureau and send it along with a copy of your discharge papers. They will not do anything if you do not send them appropriate documentation. Here is a link to the FTC’s web page regarding credit repair which includes sample letters to use in corresponding with the credit bureaus:
http://www.ftc.gov/bcp/conline/pubs/credit/bbcr.htm. - Contact a mortgage company that helps consumers that have been through a bankruptcy . You might not be able to qualify for 24 months following the bankruptcy discharge, but this should not deter you from looking for a home. There a plenty of rent with option to buy and lease to purchase home available. Showing a solid payment track record with cancelled checks will help you as you prepare to apply for a traditional mortgage .
- It is best to get your loan approval prior to writing a contract on a house. Make sure you clear all of your financial hurdles before writing your contract. This will reduce your stress, but most of all it will increase the likelihood that you get the house. Very few sellers will allow a financial glitch on your part to hold up the settlement, and they might be entitled to keep your deposit and find another purchaser if you are not able to get your loan closed.
- Realize that credit recovery after bankruptcy this takes time. Take your time and be cautious in hiring any “credit repair experts” to help you as many of them are not legitimate.
Once your bankruptcy is behind you, you can focus on the positive; becoming a happy homeowner.