Types of Bankruptcy in Fort Collins
Americans can undergo several types of bankruptcy proceedings. The two most common are known as Chapter 7 and Chapter 13. A Chapter 7 bankruptcy wipes out all of your debt with some exceptions. Filing a Chapter 13 obligates you to pay back your debts over a period of three to five years. The courts won’t allow you to file a Chapter 7 bankruptcy if you have enough disposable income to pay your debts every month.
Obtaining a Mortgage
You are now a subprime borrower and will pay more for any credit that you receive. Expect a higher interest rate initially. To build a new credit rating, you will need to use credit responsibly. Since you can’t file for bankruptcy for eight years after the discharge of your current case, you are considered a good credit risk to some companies. Obtaining credit again and using it responsibly is the first step to take toward purchasing a home after bankruptcy.
Quick Home Purchase Fix
If you just can’t wait to purchase a home or your credit wasn’t impacted too negatively, a loan backed by the Federal Housing Administration may be available to you. The FHA has a special program for applicants who have a bankruptcy on their record. The typical wait time after bankruptcy to obtain FHA insurance is two years. If you can prove that the cause of the bankruptcy was a set of circumstances beyond your control that reduced your household income by 20 percent or more for at least six months, and these circumstances won’t happen again, you may be approved for an FHA-backed mortgage one year after your bankruptcy is discharged. You will still need to re-establish credit during that year and be able to prove that you are responsible enough to repay a mortgage loan. If you filed Chapter 13, the FHA requires documentation from the lender showing one year of payouts under the bankruptcy agreement and that you’ve made all your payments on time. You will also need permission from the court to obtain a mortgage.
Title Insurance in Fort Collins
Call The Group Guaranteed Title at (970) 613-4364 to speak to the most experienced title and escrow officers in Fort Collins. When you need help purchasing the right home for you and your family, trust The Group Guaranteed Title.