If you are struggling financially, there are many options available to you for debt relief. While some households might benefit from negotiating wiggle room with their creditors, it’s more likely that people with debts they can’t pay will find long-term, permanent debt relief in bankruptcy. Depending on your financial circumstances, you can file for liquidation or reorganization bankruptcy. If you are unable to make monthly debt payments, Behm Law Group Ltd. can help you file for bankruptcy from start to finish. Our skilled attorneys can also help you understand the process of rebuilding your credit after filing a bankruptcy in Mankato, MN. Many people fear that filing a Chapter 7 bankruptcy means losing their property, including their house. While filing a chapter 7 bankruptcy can be scary and while there are many misconceptions about it, there are ways to find a new home while you start your financial life over again after your debts have been discharged. In addition to a potential home loss, even those who file for bankruptcy and don’t lose their house (like those that file for Chapter 13 bankruptcy or those renting a residence) will have to face the question of whether or not they can buy a house in the near future. There are several options to consider when trying to find a home after bankruptcy. Renting: If you just lost your home in a Chapter 7 bankruptcy case, you’re probably not in a position to buy another residence right away. In addition to various limitations to your financial situation, there are laws dictating how long you have to wait after a bankruptcy filing until you can be approved or qualify for some mortgages. Typically, this waiting period is 2-4 years. However, there are many opportunities for you to rent post-bankruptcy. Plenty of renters offer sliding scale leases and will also rent to individuals who are rebuilding their credit. Buying: For those who have the means to buy a home in the next few years after a bankruptcy, they simply have to get through the waiting period and focus on re-building their credit. The waiting times for different mortgages are as follows:
  1. Conventional loan:
    1. 4 years after a Chapter 7 discharge or dismissal
    2. 4 years after a Chapter 13 dismissal
    3. 2 years after a Chapter 13 discharge (or 4 years from the date you filed)
  2. USDA loan:
    1. 3 years after a Chapter 7 discharge or dismissal
    2. 1 year after a Chapter 13 discharge or dismissal
  3. FHA and VA loans:
    1. 2 years after a Chapter 7 discharge or dismissal
    2. any time after the court dismisses or discharges your Chapter 13 case
Any bankruptcy will be reflected on your credit report for up to seven to ten years. However, many lenders will be very incentivized to work with you because they will know that all of your previous debts have been discharged and that they will not have to compete with those discharged creditors to get paid by you. They will also know that you will not be able to file for bankruptcy relief and qualify for a bankruptcy discharge again for several years. In short, you will be able to rebuild your credit by incurring new debt during the 2-4 year waiting period. If you’re rebuilding after bankruptcy in Mankato, MN, or the surrounding area, work on your credit and stick to the waiting period rules, and you’ll be eligible to apply for the same home mortgage loans as any other applicant. To learn more about filing for bankruptcy, contact Behm Law Group Ltd. at (507) 387-7200 or email stephen@mankatobankruptcy.com

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