Filing Chapter 7 bankruptcy, then buying a home

On Behalf of | Mar 29, 2024 | Chapter 7 Bankruptcy |

Many people in Missouri and elsewhere have been hit hard by financial crisis in recent years. Financial problems are not isolated among a specific age group or lifestyle. Thankfully, the Chapter 7 bankruptcy program exists to help those who qualify discharge their debts, wiping the slate clean and starting afresh.

When an individual files a petition under the Chapter 7 bankruptcy program, it remains on that person’s credit report for 10 years. This is an issue that sometimes causes people to hesitate when considering this type of debt relief. The good news is that people can start to restore financial solvency and can even do things like purchase a home before those 10 years are up.

How long must petitioners wait before buying a house after Chapter 7 bankruptcy

Chapter 7 bankruptcy is an income-based program. To qualify, a person’s income level must be below the state’s median. It is a valuable financial tool that can resolve immediate financial crises and lay the groundwork for restored solvency down the line. As an individual’s financial standing gets stronger, he or she might feel ready to make a purchase, such as a car or even a house. The good news regarding the latter is that it is possible to buy a home after bankruptcy before it has been removed from the credit report. In fact, in as little as 4 years after completing the program, it may be possible to get a mortgage loan.

 Before and after filing bankruptcy, it is helpful to seek guidance from an attorney who is well-versed in Chapter 7 laws to streamline the process and ensure that there are no legal obstacles. Buying a house is something most people do at some point in life. Even someone who has filed for Chapter 7 bankruptcy may do so after the required amount of time has passed, and other loan requirements are met.

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Andrew Tarry