If you are facing financial difficulties significant enough to have you considering bankruptcy, you are probably dealing with numerous fears and uncertainties about the process. One of the most common concerns is whether doing so will keep you from buying a house in the future. The good news is that it is possible to buy a house after bankruptcy, but doing so will not necessarily be easy.

Buying a house after filing for bankruptcy requires a good understanding of your financial standing, and that should start as soon as the bankruptcy is approved. Your goal is to rebuild your credit rating as soon as possible. This will take time and discipline.

The first thing that you need to know is that you can’t consider purchasing a house until your filing has been discharged and the bankruptcy court has released you from liability for all of your previous debts. Though this doesn’t mean that your case is officially over, the discharge is the most important thing for potential lenders to see. It proves that you have no outstanding debt (or won’t have any shortly).

Even after your bankruptcy is discharged, you need to know that it can stay on your credit report for as long as ten years, and this is something that a potential creditor will consider before agreeing to loan you money. It may not mean that you’ll be turned down, but you may end up with terms that aren’t as attractive as they would have been if your credit rating was good.

One of the best ways of rebuilding your credit is to spend money. That may sound a bit counterintuitive, but you need to start charging again, using secured credit cards and installment loans that you pay off in full every month, before the due date. You also want to make sure that your credit report is correct, and that means checking in regularly to make sure that any wrong items are removed. Doing so is free, though you are limited to just one free report per year from each of the credit rating agencies. The good news is that they all have the same basic information, so you can check in with one of them every few months and rotate your inquiry.

The bottom line about buying a house after bankruptcy is that you want to prove to creditors that you are worthy of their trust. The best way to do that is to avoid the mistakes of the past. For more information on how to put yourself in the best possible position with regards to a bankruptcy filing, contact our office today.

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