Obtaining Mortgage after Filing Bankruptcy

01/09/2012

Mortgage BankruptcyIt is a common understanding that you will have a hard time acquiring another mortgage after bankruptcy has been filed, unless you choose to try any of the several debt solutions. Before you file for bankruptcy, you must be aware of its consequences like this can reduce your credit rating by about a hundred points or even more and that it will take about 2-3 years before you will be granted another loan.

A borrower will not be given another mortgage until he completes Chapter 13. Chapter 13 refers to the court approval allowing borrowers to get another mortgage again. This new law on bankruptcy was ratified only in the year 2005. This law is sort of a test for borrowers who have filed for bankruptcy and this basically lasts for 3-5 years. Within these years, borrowers must be able to show that they are sincere in wanting to repair their credit record, and this is by completely settling their dues promptly.

Another requirement of Chapter 13 is that a borrower must undergo credit counselling before a petition will be approved. Credit counselling is very advantageous to a petitioner as this will help him a lot in managing his finances and to prevent him from once more falling into a similar debt problem.

It is expected that a person who has filed for bankruptcy to avoid foreclosure may not be able to obtain another mortgage in the next five years. This should be enough reason why a borrower should look for other alternatives to resolve their financial or debt problem, such as debt consolidation, debt negotiation, mortgage refinancing, etc.

For people who are in the process of repairing their credit record, it is a must to get a copy of their credit report from the three credit bureaus, namely, Experian, Equifax and Trans Union. There are some creditors who fail to submit any developments to these three credit bureaus and so reports may not give similar results. By obtaining reports from all of them, you will be able to know if they are errors on the individual reports and this will allow you to report any corrections.

All U.S. citizens can get a single credit report from the different credit bureaus in a year and they can be extracted from AnnualCreditReport.com. This website was created by the three major credit bureaus and they strictly comply with the guidelines of the FACT Act or the Fair and Accurate Credit Transaction Act.

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