short sale process in new jerseyOne of the most anxiety-provoking aspects of filing for bankruptcy is the uncertainty about what will come afterward. As clear as it may be that you can’t continue in the way that you are — with bills piling up and creditors knocking on the door, — it’s also obvious that you will still need transportation to be able to get to and from work, and will always want to have a roof over your head. The question is if you’ve filed for bankruptcy, will you still be able to buy a home or car when you need one? And do you have to wait for 7 to 10 years?

It is possible to recover from a bankruptcy, and that is the point of filing – to give you a fresh start. Achieving that goal will take planning and patience, as well as a diligent approach to improving your credit profile. That should be your goal from the first day that your bankruptcy is complete. Here’s what you need to know.

Buying a Home After Bankruptcy:

Your ability to buy a home after filing for bankruptcy will depend on both the type of bankruptcy you choose and the type of loan product that you apply for. Under a Chapter 7 bankruptcy, there is generally a four-year waiting period known as “seasoning” before you can apply for a conventional loan, and a two-year waiting period to apply for Veterans Affairs financing or Federal Housing Administration financing. Under a Chapter 13 bankruptcy, the seasoning period for a conventional loan may be as short as two years if you can show a minimum of 12 months in a row of on-time payments, as well as that the court has given approval for you to incur more debt.

Buying a Car After Bankruptcy:

It generally takes about six months before positive actions you take will make your credit score rise. Even with these efforts, many lenders won’t take a chance on lending you money. Your best bet is often either your own bank or credit union, or an auto lending company that specializes in people with damaged credit. The latter will likely charge you higher interest. You also increase your chances of getting a loan by having a co-signer with good credit or making a bigger down payment. Just make sure you’re not being taken advantage of, and don’t bite off more than you can chew. While you’re trying to rebuild your credit, you don’t want to get yourself into fresh trouble.

If you need information on bankruptcy filings and how it would work for you, contact our office today.

 

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