Know the Effect of Bankruptcy on Your Ability To Buy a Home
By Alvin Clavines
A lot of people go through the same thing, that is, when they are behind for
a couple of months on their home, they just want to escape from it and declare
bankruptcy. What they do not know is that they will be very much affected by
this if they decide to purchase a home again the next time they think they are
able again. It would take at least two or four years to clear your name from
Now if it was for a medical emergency or something like of hardship, they
might consider it about two years or even longer from a lending standpoint.
Bankruptcy binds you for about to two to four years.
If the defense was because of overspending or mismanagement of funds the
lending rules at least about four years. But if what one should do is that if he
is working the first thing he should do is to keep in touch with his mortgage
company and tell him what is going on so that he can still salvage the house.
Keep in mind that ignoring this responsibility and declaring bankruptcy will
affect his credit. And even if he wants to go and rent they will check his
credit report and require of him a substantial security deposit and may even
turn him down. Declaring bankruptcy even affects one when he tries searching for
another job or even taking on an insurance policy.
To refrain even considering declaring bankruptcy one must know the truth
about it. As already said, people who are behind for a couple of months on their
home always opt for bankruptcy so that they walk away from it. The wrong
information out there is that they can only be helped only if they are behind
mortgage which is not true. The fact is that if you pay on time you have a
better chance of getting helped, whereas if you are not able to help fully then
you will even have to worry about legal fees and penalties.
The first step to do in such situation is to call your and call your lender
and tell the truth so that they can work with you. Bear in mind that the first
person you talk is not always the person who will help you through your ordeal.
You have to work your way up to the real person who will be able to assist you
in this regard.
Although some would say that declaring bankruptcy may have an advantageous
effect, that is, you are able to evade paying off your debts, thus giving you
freedom. It also creates independence in a sense that you are no longer ran
after by lending agencies and forcing you to pay up. That may be the case, but
the effect of bankruptcy somehow tells how institution will view your credit
report when you are already trying to make a good life for yourself. Also, hey
will view you as to what kind of character you have. The effect of bankruptcy on
one’s ability to buy a home is an important thing to ponder before jumping to a