Life After Chapter 13 Bankruptcy: Can You Buy A House?
Gilbert Bankruptcy Lawyer’s Guide On Home Loans After Filing Chapter 13 Bankruptcy
One of the things that many people are most concerned about when considering whether to file for bankruptcy is whether they will be able to keep the house they have or to buy a house in the future. Chapter 13 bankruptcy is a popular choice for helping people to save their homes from foreclosure, but it can also help people restructure their debt when they make too much to qualify for Chapter 7 bankruptcy. Chapter 13 puts people on a more affordable debt repayment plan and helps them get back on firm financial footing over a three- to five-year period.
With time, your credit history and score will improve so that you can take on new lines of credit, including a mortgage for a new home. Here’s what you need to know about Chapter 13 bankruptcy and buying a new home:
Can You Buy A House While In Chapter 13?
Your Chapter 13 bankruptcy plan will last three to five years. After you have paid down some of your debt during that time, you may find that your finances are better and you are ready to buy a house. The trouble is that you can’t take on any new lines of credit without getting approval from the bankruptcy trustee first.
You may get approved if you have been making payments on time with your Chapter 13 bankruptcy plan and you have no past due accounts since your bankruptcy filing. However, you’ll need to talk with your bankruptcy attorney to know what to expect.
Getting A Loan To Buy A House
You may be ready to buy a home, but the banks may not be ready to lend you the money. You may be on steady financial footing, but the banks are still going to consider you a risk. Your bankruptcy filing shows that you have had some financial trouble in the past, and the banks want to put a long time between then and lending you money.
But don’t worry! You aren’t going to have to wait years and years. In some cases, you can get a loan a year after a bankruptcy discharge. Most lenders are willing to give you a loan after two years. However, if you are still in the middle of your bankruptcy plan, it may be a little while longer.
Seek Down Payment Assistance
The tricky bit about buying a house while you are still in the middle of a Chapter 13 bankruptcy repayment plan is the down payment. If you have managed to save enough for a down payment, the bankruptcy court is likely to believe that you have enough money to pay a bigger payment to your creditors. Your plan may be adjusted.
One option may be to borrow the down payment from a family member. However, even if the money comes from a family member, that’s still considered a loan, and the bankruptcy trustee still has to approve new lines of credit.
You will have a better time getting approved for a loan and moving through the process of buying a new home if you can wait until after your Chapter 13 bankruptcy plan is resolved. However, if you need to move before the end of your repayment plan, just talk to your bankruptcy attorney and your bankruptcy trustee about your options. You may have to go through a few extra steps, but it may still be possible to purchase a new home. Always work within your financial means to ensure your success, both for your short-term goal of buying the house but also for your long-term goal of ensuring that your debt remains manageable.
Looking For Debt Relief? Contact Experienced Bankruptcy Lawyers In Gilbert
Call Gilbert Bankruptcy Lawyers to learn about how bankruptcy can help you get the debt relief you need. We represent clients seeking debt relief through both Chapter 7 bankruptcy and Chapter 13 bankruptcy. A bankruptcy attorney from our team will help you understand how these options affect your ability to own or to purchase real estate, a vehicle, or other assets. Our goal is to help you get the maximum debt relief possible while protecting what you own. Call us in Gilbert to schedule a consultation with a bankruptcy lawyer today.