I declared bankruptcy 3 years ago. I want to buy a house. Is it legal if I can get financing?

Answer 1

Best Answer - Chosen by Voters

I don't have much experience with home loans but I have helped many people in a Chapter 13 Bankruptcy get an auto loan.

Prior to applying with a lender you should visit with your trustee / attorney and ask him or her for an "Authorization to Incur Debt". This is a legal document that states that the new loan will not be included in the bankruptcy.

Typically, it will state the maximum monthly payment that you can occur.

If you apply with a lender first they will insist on this document prior to approving the loan. Without it you could close the loan and immediatly include the new loan in you bankruptcy.

Answer 2

If you declared Chapter 7 bankruptcy, you can purchase anything you can qualify for. There is no limit or restriction. If you filed Chapter 13, there may be limits on the additional credit you are allowed to take on while you pay off your previous creditors. You should call your bankruptcy lawyer or the bankruptcy trustee for current laws.

Source(s):

Former bankruptcy attorney

Answer 3

of course!! It may be hard to get financed, and you'll pay higher interest, but you can buy a house.

Answer 4

Absolutely even 1 day outta BK...
Call me I will walk u thru various opportunities.
RE Broker
[e-mail] Thank you Abel.

Answer 5

All you have to do is go to a lender and ask if you can buy a house and how much can I spend..
Since you filed bankrupcy --you will probable get a no...Your past with credit predicts the future for credit...

Answer 6

Absolutely! You can buy anything that is for sale if you have the money. Now for the bad news.... Bankruptcy wrecks your credit score (Which is a measure of determining how likely you are to pay back a loan). Due to this is it not likely you would be able to find financing to buy a house. If you did it would likely be a sub-prime (Variable Interest, High Interest, Teaser Rate, Balloon Payment, etc) loan, taking a loan such as this would not be a good financial decision. You would be setting yourself up for another financial failure and either losing your home or having to declare bankruptcy again. Also, with the implosion of the sub-prime mortgage sector and the tight credit market you would not likely be able to find even something like this. If you want to buy a house, start saving money to pay for it, when you have a large down payment and the bankruptcy is off your credit go for it and enjoy owning a home and being financially sound.

Source(s):

BS Economics Graduate MS Finance Student

Answer 7

If you are discharged and you qualify for financing it is perfectly legal.

Beware of subprime and predatory lenders who prey on people with bad credit...

Answer 8

ssm is right After a 7 you have the best credit there is regarding your inability to file again for many years. If you are still retiring debt in accordance to your agreement with the creditors you'll need to contact your trustee.

Answer 9

Sheri, there a lot of good answers here except.....Gerald. Do not pay him any mind. He likes to harass people who have had credit problems in the past. You certainly can get financing as long as you have been responsible with your credit since the BK. This means no late payments, no judgements or collections dating after the discharge of your BK.

Source(s):

18 plus years in Mortgage Banking.

Answer 10

Of course it is. the only way that you will be able to acquire financing is to have a sizeable down payment. Also watch the news they are really cracking down on good credit. Creditors are going in the hole and closing up mortgage companies laying off 1000's of people due to forclosures. watch the forclousure listings in your area for some good finds.

Answer 11

Absolutely. There are loans available to people who have declared bankruptcy one day after the bankruptcy has been discharged. The rates may not be great but if you have been paying your bills on time since your bankruptcy and can show steady employment or income you probably will be surprised at how available loans are.

The only caveat is that with the current subprime mortgage crisis, lenders have probably tightened up their lending criteria. That is more of a sticking point than anything. But legal? Yep.

Best of luck to you,

Barbara
www.therealestatebirddog.com