If you’re afraid that filing Chapter 7 bankruptcy will prevent you from purchasing your dream home or concerned that you’ll be unable to replace a vehicle that was repossessed, don’t be! While some conditions do apply, it is still possible for you to buy a new house or car after filing for Chapter 7 in Minnesota.
And, if you file for Chapter 7 with Kain & Scott, you can take advantage of our Free 90 Day Credit Repair Program that will help you raise your credit score and obtain financing from one of our trusted Minnesota lenders to help you purchase the things your family needs.
For more information on buying a home or car after filing for Chapter 7 bankruptcy in Minnesota, as well as how our Free 90 Day Credit Repair Program can help, read on!
Buying a home after Chapter 7 bankruptcy
The good news is that yes, you can buy a home after filing for Chapter 7 bankruptcy in Minnesota. The bad news is that, depending on your case, you may not be able to purchase a home as quickly as you would like.
After filing for Chapter 7, there is a mandatory waiting period before you can apply for a mortgage. The waiting period after a Chapter 7 depends on what type of mortgage you are applying for. Although there are exceptions, the standard waiting period for each type of mortgage is:
- FHA loans: 2 years
- VA home loans: 2 years
- Fannie Mae or Freddie Mac mortgages: 4 years
- USDA home loans: 3 years
Obtaining a mortgage becomes slightly more complicated when your bankruptcy occurs in conjunction with a foreclosure. If the foreclosure occurred before the bankruptcy, the waiting period starts at the date of your debt discharge and the standard waiting period for each type listed above applies. If your home was foreclosed on after your bankruptcy however, the waiting period may be extended, depending on the unique circumstances of your case.
It’s also important to remember that in cases where you failed to repay a government-backed loan (such as a VA loan), it is unlikely that you will be able to obtain another government-backed loan until the unpaid loan is resolved.
If you’re considering filing for bankruptcy and are concerned about the impact a Chapter 7 would have on your ability to purchase a home, one of the qualified and knowledgeable bankruptcy specialists at Kain & Scott can evaluate your ability to obtain a mortgage based on the details of your individual case.
Buying a car after Chapter 7 bankruptcy
Whether or not you will be able to keep your vehicle during a Chapter 7 depends on the amount of equity you have in your vehicle. If you choose to not reaffirm your debt and instead liquidate your car loan, replacing your car or truck as soon as possible is often a high priority for most bankruptcy clients.
Buying a car after a Chapter 7 bankruptcy is much more straight-forward than buying a home. You can begin applying for credit, such as a car loan, as soon as your debt is discharged: typically, your unsecured debt will be discharged 90 – 120 days from the date you filed for Chapter 7.
However, if your credit score has not been repaired before you apply for a car loan, you will probably be limited as to the type of vehicle you can purchase and the repayment terms you are able to obtain. For instance, you may need to purchase a used vehicle or only be able to obtain financing with a higher-than-average interest rate.
During your free initial consultation with Kain & Scott, your bankruptcy lawyer can help you determine whether keeping your car or not is the best option for you.
Buy a new home or car with Kain & Scott’s Free 90 Day Credit Repair Program
Whether you want to buy a new home or a new car, repairing your credit first can make a big difference both on whether you are approved and whether you receive the best loan terms possible.
Our bankruptcy law firm understands the importance of repairing your credit in addition to eliminating your debt. With Kain & Scott’s exclusive Free 90 Day Credit Repair Program, you’ll receive the guidance you need to repair your credit fast and gain access to our list of trusted Minnesota lenders.
Don’t let fear of being unable to purchase a home or car stop you from getting a fresh financial start. At your free initial consultation, your bankruptcy lawyer will determine whether Chapter 7 is right for your family and give you more information about our Free 90 Day Credit Repair Program. To schedule your free initial consultation with Minnesota’s leading bankruptcy law firm today, contact us online at www.kainscott.com.