In the first few months of a new year, many Tennessee residents want to make changes in their lives. Whether those change relate to health, habits or finances, the turning point of a new year is often a time for a reset. As a result, if you have had financial struggles for some time, you may be considering whether taking steps to seriously address those struggles is right for you in the new year.
Depending on the specifics of your financial affairs, bankruptcy may be an option that has crossed your mind more than once. However, you may worry that using this method to free yourself from your seemingly insurmountable debt will prevent you from other opportunities in the future, like buying a house. However, is that really the case?
Can you still buy a house after filing bankruptcy?
Unfortunately, a great deal of misinformation about bankruptcy exists. You have undoubtedly heard many “facts” about bankruptcy that are not facts at all. For instance, you may have heard that bankruptcy will ruin your creditworthiness forever or that you will never have the ability to get a credit card or loan after using this debt relief method. While these ideas may bring some hesitancy, it is important to know that each case is different and that your future credit depends significantly on your actions after bankruptcy.
If you have specific concerns about purchasing a house in the future, it may bring you some relief to know that this possibility is not out of reach simply because of bankruptcy. However, having a bankruptcy on record could affect details of any real estate transaction and loan. For instance, depending on your credit score at the time you apply for the mortgage, you may not qualify for a low interest rate, which could make your payments higher and possibly out of your intended budget.
Taking time to get back on track
Though completing bankruptcy may feel like a weight lifting from your shoulders, you would be wise to give yourself some time to build up your finances and credit before attempting any major purchases, such as a house. Additionally, after completing bankruptcy, you have to wait a mandatory amount of time — which depends on the type of bankruptcy you complete — before you qualify for a mortgage.
Taking the time to assess your financial circumstances after bankruptcy, setting a budget and creating financial goals could help you better ensure that you remain in a stable position to possibly purchase a house at a later time. It could also lessen the likelihood of you experiencing an overwhelming financial situation later.