MYTH: YOU CAN’T BUY A HOME WITH A BANKRUPTCY ON YOUR CREDIT REPORT.
A common misconception is that you can’t buy a home with a Bankruptcy on your credit report. Your credit score does take a hit from bankruptcy, although many of my clients often see their credit score jump significantly after discharge. The Bankruptcy stays on your credit report for 7 years in a Chapter 13 and for 10 years in a Chapter 7. But credit score is not the only factor lenders look at in deciding whether to approve you for a home loan. If you have a steady job and have saved enough money for a down payment, your credit score may affect the interest rate you get, but it won’t necessarily keep you from getting a loan. Also, consider taking out an FHA loan instead of a conventional loan. A Chapter 13 filer can apply for an FHA loan as soon as one year after starting bankruptcy payments, and a Chapter 7 filer can apply for a mortgage as soon as two year from a bankruptcy discharge.
I am, Russell Simonetta, Central New York’s Premier Bankruptcy Lawyer!