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How does bankruptcy affect your ability to buy a home?

Many Washington residents may be wondering how bankruptcy can be a viable option for them, but they are concerned about the long-term effects that it may have on their personal finances. Some consumers may not realize that filing for bankruptcy does not actually have to hinder their ability to purchase a home. In fact, bankruptcy may be one of the best ways to achieve debt relief.

For Washington residents who are facing insurmountable debt, bankruptcy can offer protection from some of the negative consequences of financial struggles. Bankruptcy may actually be the best way for some consumers with a poor debt history to become qualified to own a home. However, bankruptcy can impact a credit rating, which can impact the ability to secure a loan.

When exploring the possibility of bankruptcy or buying a home after bankruptcy, it may be best to determine how to quickly rebuild credit so that a home purchase will be easier. Some of the most vital ways to reestablish credit include making future payments on time and carefully monitoring debt levels. While some situations may require people to wait a certain amount of time after the bankruptcy filing before buying a home, a non-prime lender is a faster option.

Bankruptcy is often a constructive and orderly way to pay off debt. Many people may have been given a negative perception of this step, but it can actually be one of the best ways to get protection and relief when facing insurmountable debt. However, it is important to explore all options before making any major financial decision.

Source: Financial Post, So you are bankrupt, does that mean you cant buy a house?, Garry Marr, March 15, 2014

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