Is a mortgage possible after chapter 13 bankruptcy?
If you are facing a difficult financial situation but avoiding the option to file for bankruptcy because it could affect you receiving a mortgage in the future, it is important to consider more on the protections that are available from bankruptcy cases in Florida. There is a stigma associated with bankruptcy that suggests that your chance of getting a mortgage is virtually impossible after filing for bankruptcy. It is definitely possible to obtain a mortgage after you filed for chapter 13 bankruptcy, depending on your financial circumstances.
Individuals who have filed for chapter 13 are often considered to be in a more favorable debt reorganization format than those that have filed for Chapter 7. This is because individuals that have filed for Chapter 13 bankruptcy have made an ongoing effort to pay off some of their debts. Individuals that qualify for Chapter 7 bankruptcy had taken a settlement offer and paid off less of their debts to creditors.
Credit reporting agencies often view chapter 13 bankruptcy as a more favorable reorganization effort as well. Chapter 13 bankruptcy is removed from a credit rating after just seven years rather than the full 10 years where bankruptcy process on a record after chapter 7 bankruptcy.
Regardless of the chapter bankruptcy that you filed under, a person’s credit score will not face the same damage as those who are in financial distress and holding off from filing. You can continue to see your credit score slip if your debt accumulates.
Choosing the option to take on chapter 13 bankruptcy can make you a much more attractive borrower in the future. Choosing the option to file for bankruptcy today could help to secure your future as a Florida resident. The normal waiting period after filing for Chapter 13 bankruptcy to apply to a mortgage is two years. Take control of your debt today and remember that receiving a mortgage is possible even after bankruptcy.
This post was written by Trey Wright, a bankruptcy attorney in Tallahassee, FL. Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.