How to Buy a House After Chapter 7
If you have gone through Chapter 7 Bankruptcy, you may be wondering if your credit will ever heal. If you are patient and take steps to repair your credit score, you will eventually improve your rating and be able to buy yourself a car or even a home. There is life after bankruptcy, as long as you are careful not to repeat past mistakes.
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Instructions
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Wait it out. You cannot repair your credit score overnight, and it will take time to fix your credit after bankruptcy. According to the attorneys at the Grossbart, Portney, and Rosenberg law firm, two years after a bankruptcy your credit score will no longer be negatively affected by the bankruptcy itself. If you have made strides to improve your credit during those two years, you may also be able to get a mortgage after that time.
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Rebuild your credit slowly. You should not rush into a credit card overload the way you may have done prebankruptcy. Instead, get one credit card and only make small charges that you can pay off every month. Making regular on-time payments in the appropriate amount can repair your credit score by rebuilding positive credit relationships. Over time, your credit score will rise.
You may not be able to get an unsecured credit card or one with a low interest rate immediately after bankruptcy. You may have to pay a deposit to the credit card company in order to get credit; doing so will help you rebuild your credit, so you should make the effort to get a credit card even if you have to secure it with a deposit.
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Do not fall back into old habits. Keep your "nose clean" in terms of your credit after a bankruptcy. Pay your bills on time, and do not take out loans or credit balances you cannot repay quickly. Making late payments or failing to pay off debts will only cause your credit score to sink even lower, which you definitely want to avoid if you're trying to rebuild your credit enough to buy a home after bankruptcy.
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Keep track of your credit. Your bankruptcy can only remain on your credit report for 10 years; after that time has passed, check your credit report to ensure that the bankruptcy has been removed. If it hasn't, you can dispute it through the credit reporting agency's Web site.
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When you apply for a mortgage, be prepared to make amends for your bad credit. You may need to give a high down payment, agree to a high interest rate, get someone with better credit to cosign for you, or provide references who can verify positive credit history. Since you essentially walked away from your debts when you filed Chapter 7, you will have to demonstrate that you are unlikely to do so again.
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