Bankruptcy and Buying a Home

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Filing bankruptcy is a stressful time in a person's life. Along with discharging your debts and gaining a fresh start, you may wonder if you will be able to buy a home after a bankruptcy. The answer is yes! Mortgage companies and online lenders are now offering home loans for those who have a bankruptcy on their credit report. Some lenders will even approve your loan as soon as one day after your bankruptcy has been discharged.

Buying a home after bankruptcy is no longer impossible. There are many reasons a person chooses to file bankruptcy. The loss of a job, unexpected medical bills, and overwhelming credit card debt are just a few of the factors that can lead to filing bankruptcy. The mortgage lending industry has created special loan packages and terms for those who have filed bankruptcy in the past. Lenders have little to lose in approving a home loan after bankruptcy. With your home serving as collateral for the loan, the lender can feel confident in approving you for a home loan, often soon after your bankruptcy has been discharged.

Filing bankruptcy and buying a home are no longer mutually exclusive terms. Both traditional and online lenders can give you a good interest rate and payments you can afford, even after filing bankruptcy. If you have filed Chapter 11 or Chapter 7 bankruptcy and are wondering if you can obtain a home loan, contact a lender today who specializes in approving mortgages after bankruptcy. Interest rates are currently lower that they have been in decades. Even after filing bankruptcy you can get your new home loan approved and receive a great interest rate. Online lenders and mortgage companies are competing for your business. Do not let a past bankruptcy prevent you from purchasing the new home of your dreams.

If you have filed bankruptcy in the past and would like to purchase a home, there are numerous programs and loan products that will suit your needs. Lenders will approve your loan quickly and give you excellent terms on your mortgage. Some lenders will require that a certain amount of time pass before approving a new home loan after a bankruptcy while other lenders can approve your loan in a little as one day after your bankruptcy has been discharged. Now is the perfect time to apply for a mortgage, even if you have filed for bankruptcy in the past.

To view our list of recommended mortgage lenders for buying a home after
bankruptcy visit this page:
Recommended
After Bankruptcy Mortgage Lenders.

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Bankruptcy Chapter 7 Exemptions

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Chapter 7 is a 'liquidation' of nonexempt assets to pay debts. In an orderly, court-supervised procedure, a court appointed trustee liquidates the non-exempt assets of the debtor's estate and makes distributions to creditors. In Chapter 7, the debtor selects property he/she is eligible to keep from either a list of state exemptions or exemptions provided in the Federal Bankruptcy Code. Although the debtor files a schedule C form for property claimed as exempt, the property is not exempt until the trustee files the property exemption report which actually divides the property as exempt or non-exempt.

Although state exemption laws are different from state to state, these states typically allow the debtor to keep these types of property: The debtor can exempt Up to $17,425 of equity in the home (homestead exemption). Some states have no homestead exemption; some allow debtors to protect all or most of the equity in their home. The debtor may be able to keep jewelry only worth up to $1,000, a vehicle with more than $2,400 of equity. The debtor is allowed to keep the cash value of Insurance policies. Pensions under the Employee Retirement Income Security Act (ERISA) are fully exempted in bankruptcy. Not only all public benefits, such as welfare, social security, and unemployment insurance but also tools used on job and at least 75% of wages are fully protected.

To get exemption the debtor must file the bankruptcy case in the state he/she lived in for the 730 days (2 years) before filing; or the state where he/she lived the majority of the 180 period preceding the 2-year period. Federal exemptions are retirement benefits (veteran's benefits etc.), survivor's benefits (judicial center director's benefits, lighthouse worker's benefits etc.), death disability benefits (injury compensations etc.) and miscellaneous (military group insurance etc.). One must note that federal exemptions are not available for all states.

The Bankruptcy Code allows the debtor to keep certain exempt property; but a trustee will liquidate the debtor's remaining assets.

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