Ways & How

how to buy a house after bankruptcy discharge

how to buy a house after bankruptcy discharge

Financially distressed individuals are given the chance by the U.S. federal courts to be able to start anew through a bankruptcy filing. The filer will be protected from the debts incurred when deemed bankrupt. The intention is never to disable the filer but to relax the debtors so that the financial issues can be dealt with clarity. How to buy a house after bankruptcy discharge is possible and can be facilitated within your capacity to pay. Read through the steps below to know more about strengthening your purchase power once again:

  1. Start with contacting the three credit bureaus to make the necessary updates regarding your status after your bankruptcy discharge papers have been served. You can log onto http://www.equifax.com, http://www.transunion.com, and http://www.experian.com to get the contacts and the procedures. Make sure to get a copy of your credit report for the record.

  2. Note important details from your credit records. Recognize which creditors are listed as part of the accounts included in the bankruptcy.

    There should not be any remaining balances after the debts have been discharged due to the bankruptcy. Verification of the “amount due” column must bear the “discharge on date” remarks. This is the public part of the credit report.

  3. Any discrepancies in the credit records must be immediately reported to the designated credit bureau. A formal letter must be submitted containing the nature of the complaint or discrepancy, like not having a “zero” in the credit balances, or the status of being discharged due to bankruptcy not reflected in the records. Not seeing this in the credit records must be indicated in the letter also.

  4. Make sure to furnish a copy of the “Schedule of Creditors” from the court because, without this, the status of the creditors will not be updated to be listed as “included in the bankruptcy.” The records in general must be cleared from any debts and other negative remarks. You will need this to have a fresh start, and you will have the chance of working your way towards buying a house.

  5. Start enrolling in common credit facilities so that you can build your financial credit history needed by the bank or financial institution for the mortgage for your house at the appropriate time. You can get scores from credit cards, auto loans, or gas cards. Choose creditors that are accredited by the three credit bureaus. Make your regular payments on time and never exceed your credit limit. It is a sign that you are doing well in the management of your debts when your creditors begin increasing your credit limit. This will make your financial credit history look good.

  6. It’s not true that creditors will no longer trust you anymore if you have a history of a bankruptcy. There are even creditors that specialize in providing credit to people who are discharged from previous debts due to a bankruptcy. You just have to maintain a substantial, regular income so that you have equity to offer. You must have collected new credit scores, and the date of your bankruptcy discharge cannot be too recent to allow such positive changes. It is more feasible to deal with bankruptcy lenders when you are ready to purchase your new home because they are the ones who have knowledge about how the purchase can be made given your situation and history.

How to buy a house after bankruptcy discharge can be facilitated when you have successfully displayed proof of your being responsible in managing your finances. You might not be able to receive the maximum in available credit such as you might have had before, but you can rest assured that there’s still a progressive life after a bankruptcy when you are able to learn from your previous mistakes.


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