Filing for bankruptcy is a common occurrence in today’s economy. However, bankruptcy still carries a negative stigma with most people, who often assume the reason for a person’s bankruptcy is irresponsibility, laziness or some sort of dishonesty. In many cases, this stigma may result in the person filing for bankruptcy to give up on ever qualifying for a mortgage or owning a home. On the contrary, recovering from bankruptcy and qualifying for home ownership may happen in less time than you think. If you are considering filing for bankruptcy in Oklahoma, and you have questions about how this could affect your ability to qualify for a loan and buy a home in the future, consult our knowledgeable attorneys at Oklahoma Legal Center today.
Rebuilding Your Credit Following Bankruptcy
There are two major types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcies discharge most of your debt obligations, but can put a dent in your credit score, which can make it difficult to get credit for a period of time afterward. The Federal Housing Administration (FHA) will insure mortgages two years after a Chapter 7 discharge date, but the debtor must establish a credit history during those two years without any issues like late payments or collections judgments. There is an exception to this rule however, such as in cases where your bankruptcy results from conditions outside of your control. For example, if your bankruptcy was influenced by a serious illness or natural catastrophe, the FHA will typically allow you to qualify for a loan one year after the discharge date.
In Chapter 13 bankruptcy, which establishes a court-ordered repayment plan for debts, your credit score doesn’t take as much of a hit as it does following a Chapter 7 bankruptcy. Because of this, as long as you comply with the repayment schedule, the FHA only requires a 12-month wait from the day you begin making your payments. However, these Chapter 13 bankruptcy payments must be on time, and you must obtain written permission from the court in order to qualify for a new mortgage.
Contact Our Qualified Attorneys Today
There are other ways you can get a head start on a good credit history following a bankruptcy in Oklahoma. Continue repaying any remaining debts, like student loans, on time and as agreed. You may consider applying for a store credit card, as long as you only charge what you can afford to pay off in full every month. Another good option would be to apply for a high-interest-rate loan, such as a car loan, to help you build a good credit history, as long as you make your payments on time. Taking these tips into consideration, you can significantly improve your chances of qualifying for a mortgage loan after filing for bankruptcy in Oklahoma. If you are struggling with overwhelming debt and you think bankruptcy might be a good option for your, contact our experienced lawyers at Oklahoma Legal Center to discuss your options.