Many Illinois residents may feel that filing for bankruptcy is the worst thing they can do to help their financial situations. While it is not generally the first thing to resort to in a financial crisis, it is not something to shy away from either. A Chapter 13 filing can have numerous benefits and will not prevent a person from achieving his or her economic goals in the future.
One question many people have before filing for bankruptcy is: How will this affect my ability to buy a house down the road? The simple truth of the matter is, filing for bankruptcy will cause one’s credit score to drop. This can make getting a home loan somewhat difficult; however, it is possible to rebuild one’s credit after a bankruptcy petition has been approved.
After filing for bankruptcy, one may not be able to seek a home loan for two to four years. It all depends on the terms of the bankruptcy filing. During this waiting period, those making payments to creditors through a Chapter 13 repayment schedule can rebuild their credit by making sure payments are submitted on time and by not having any delinquencies on new lines of credit opened post bankruptcy.
While Illinois residents who pursue Chapter 13 bankruptcies may have to put their home ownership dreams on hold for a little while, it is not a permanent hold. They may have the ability to buy houses just a few years after their filings. Bankruptcy can simply help them get their monetary issues in order and set them on the path to financial freedom.
Source: realtor.com, “Buying a House After Bankruptcy? How Long to Wait and What to Do“, Margaret Heidenry, Accessed on Dec. 28, 2017