Many New York residents are facing financial difficulties, and bankruptcy can be a viable option for many people to get out of unmanageable debt. However, one of the main concerns surrounding a bankruptcy decision involves whether it can affect the potential future purchase of a home.
Bankruptcy does not mean you will never be able to own a home. Many people believe they will need to wait between 7 to 10 years after a bankruptcy to even begin to think about purchasing a home, but that is not always the case, nor is it practical for most people.
Rather, with rebuilt credit and no new debt, an individual can generally purchase a house one to two years after filing for bankruptcy. Sometimes bankruptcy may be the best choice for people who wish to be homeowners one day, as the clearing of debts may make a purchase possible. There are real estate agents and mortgage companies willing to help with home purchases, even if potential buyers have a bankruptcy filing on their credit record.
Things to think about
There are several things to keep in mind when pursuing a home purchase after a bankruptcy. The reality is that your credit score will be poor post-bankruptcy, so be prepared to pay a higher interest rate or face additional challenges with getting a mortgage. Doing thorough research on the types of loans and requirements is important, to avoid more financial stress due to a bad deal on a mortgage.
It is important to do a thorough assessment of any still-remaining or new expenses or debts, such as car or student loans. If your financial situation is still precarious, it may be best to wait awhile longer before purchasing a home.
If it looks like bankruptcy is on the horizon, but you are worried about not being able to purchase a home, it can help to speak with a bankruptcy attorney who can analyze your specific situation.