If I were to file bankruptcy, what will happen to my credit? I want to purchase a home, how long will I have to wait before I can do that IF I decide to file bankruptcy?
2 Answers from Attorneys
Your credit may be damaged. The BK normally stays on your records for 7 to 10 years.
As for the home, you really could not purchase it while in BK. Once your papers are filed within 30 to 45 days a 341a meeting of the creditors is held. Normally, 60 days thereafter the BK is discharged and all of the unsecure debts are gone.
I would suggest that you seek out a local attorney who specializes in BK law for more information.
Bankruptcy Credit Rating
When you file bankruptcy, your credit report will reflect this for ten (10) years. Some creditors will never give you credit during this time. Some creditors will lend you money right away, but at a very high rate of interest. Some will require a co-signer. At any rate, your credit is probably pretty bad right now if you are considering bankruptcy because you can't pay your bills. Sometimes filing can make you more attractive to lenders because your debt is reduced and you will not be able to file bankruptcy again for six (6) more years.
It will be difficult to get new financing to purchase a house for at least a couple of years. You will need a larger down payment and will probably pay a higher interest rate. Owner financing and no-qualifying assumptions will probably be your best way to get into a house. Talk to your real estate agent for current info on rates and qualifying.
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