For people in Maryland who are confronted with overwhelming debt as well as constant phone calls and notifications from creditors and debt collectors, bankruptcy may be a worthwhile option. Still, for those who file for Chapter 7 bankruptcy, there are concerns about how a bankruptcy impacts their future. This can lead to various challenges.
Seeking a mortgage after bankruptcy
One issue that frequently arises is getting a mortgage. Chapter 7 will damage a person’s credit score, but there are still ways to get a mortgage. Chapter 7 is a liquidation bankruptcy, meaning it can eliminate the person’s unsecured debt and give them a fresh start. However, when a lender checks the person’s credit score, the bankruptcy will appear and could be a hindrance.
After a few years of rebuilding credit, a person who filed for and successfully completed a Chapter 7 could be approved for a mortgage. This may depend on the lender. For example, the Federal Housing Administration and the U.S. Department of Veterans Affairs have a two-year waiting period from the date the bankruptcy paperwork was filed. It is four years when using a conventional lender. Extenuating circumstances could be considered to reduce the waiting period.
Legal assistance with bankruptcy and its aftermath
People who file for bankruptcy are often able to get back on stronger financial ground relatively quickly, drastically improve their credit score and be well on their way to getting a mortgage. To understand all the essential aspects of a Chapter 7 bankruptcy, experienced assistance may be beneficial. A bankruptcy lawyer may provide information on how to proceed and what happens when the process is complete.