Can I Buy a House or Car After Bankruptcy?
March 2, 2021
There are lots of misconceptions about bankruptcy, and many people have many false and incorrect beliefs as to what you can do and what you can't do after you file for bankruptcy. Some people think they won't be able to get credit for 7 years. Some people think they will never be able to finance a house or a car. Well, I think now is a good time to set the record straight.
Please realize that when the bankruptcy laws were passed, the major purpose was to help people put the past behind them and move forward towards a fresh start and a much brighter financial future. Bankruptcy was not created to punish you. There should be no stigma or shame if you have to file for bankruptcy. I tell my clients to be grateful that we have laws in this country to protect and help people who are under tremendous stress as a result of debts that they simply can't handle. For the vast majority of people who file bankruptcy, whatever the reason they have to file, it's simply not their fault. Did they create the Covid pandemic? Did they intentionally mismanage their finances? Did they cause their employers' businesses to go down the tubes?
Let's face the facts. The vast majority of people who have to file for bankruptcy have been victimized by something beyond their control. So if you wind up filing for bankruptcy, hold your head up, realize that this could very well be the beginning of the dawning of a new day for you and your family, and be thankful that you are entitled to have debt relief and stress relief. You have been given the right to reset, to start all over with a clean slate. This could be a tremendous opportunity for you and your family, and many people have said that filing for bankruptcy was one of the smartest financial decisions they have ever made. And if they'd known about all of the benefits, they would have done it much sooner.
So let's answer the questions. Yes, you can buy and finance a house after you have successfully completed your bankruptcy, and sometimes you can even buy and finance a house while you are still in bankruptcy. If you have obtained a chapter 7 discharge, you can qualify for financing a house with the FHA two 2 years after your discharge. And if you have any trouble with doing that, I have relationships with people that I can introduce you to, and hopefully they can help you get that mortgage, and they might also be able to help you find the house of your dreams.
If you are doing a chapter 13, and you have made your payments to the trustee on time for about a year, there may be a way you can finance a house while you are still in the Chapter 13. Everyone's case is usually a little bit different, so if you want more specific information on how you might be able to finance a house for yourself while you are in an active chapter 13 case, just give me a call, and I'd be happy to give you a free consultation with no obligation.
Now, can you finance a car either after or during your bankruptcy? If you received a chapter 7 or chapter 13 discharge, there are lots of car dealers that would probably be happy and willing to finance a car for you. I suggest you shop around a little bit so you can get the best interest rate. I also suggest that you check out the vehicle's value before you sign on the dotted line. You can get plenty of information on the value of the vehicle you intend to buy by going to either nada.com or kbb.com. Don't let the car dealers rip you off.
You can also, in certain instances, buy and finance a vehicle while you are in an active chapter 7 or 13. Everyone's situation is usually a little bit different, and the best advice I can give you is that if you are in an active bankruptcy of any type, and you want to finance a vehicle while your bankruptcy is still alive and well, check with your attorney, of if you don't have one, check with a reputable bankruptcy attorney. If you don't have an attorney already, you can contact me at 856-696-8300 and I'd be happy to offer you a free consultation so that I can make things as easy as possible for you to get that vehicle that you need.