Many New Port Richey area residents go through tough financial times. Often, financial distress is caused by something out of a person’s control. These can be medical emergencies, a job loss, overwhelming bills, a divorce, etc. Sometimes bankruptcy can be the best option to getting a person’s life back on track. A person may wonder if they can still buy a house with a bankruptcy on their record.
Even though a person may have declared bankruptcy it does not mean their financial life is over. If a person is interested in purchasing a home, there are steps they can take after bankruptcy to do this.
- Waiting period. There is a waiting period before a person can apply for a mortgage. For those who filed Chapter 7 bankruptcy, the waiting period if 4 years. Those who filed Chapter 13 have a wait time of 4 years if the court dismisses the bankruptcy. If the court discharges the bankruptcy the wait time is 4 years from the date a person files and 2 years from the dismissal date.
- Repair credit. After a bankruptcy a person’s credit score can be low. A person should work on improving their credit score by obtaining a secured credit card and paying the balance on time each month. They should also pay down their debt and pay all other bills on time.
- Write a letter of explanation. Although a letter of explanation is not required, it can provide important information to a lender. The letter of explanation should include what led to the bankruptcy and how a person plans to never have it happen again.
- Get preapproval. Before a person goes out to purchase a home, they should seek a mortgage preapproval. This can allow a person to understand how much they can spend on a home and tells sellers that they can secure the funding for their home.
- Respond to lender inquiries. After a person applies for a mortgage a lender may inquire about the bankruptcy. It is important for a person to respond to these inquiries honestly.
A legal professional who is skilled in bankruptcy can help their client understand their options when it comes to a Florida bankruptcy. They can help their client get a fresh financial start and a sold future.