Filing Chapter 7 bankruptcy and receiving a discharge is not a barrier to home ownership if a person takes the steps to becoming creditworthy again. The premise of bankruptcy is to give people a fresh start financially. But to buy a house, most of us need a mortgage to do so.
Credit Requirements of Home Ownership
A company’s willingness to lend money to someone who filed bankruptcy depends on how well one establishes creditworthiness after bankruptcy. The credit scoring system helps a lender make a decision about extending credit. The best interest rates go to those with the highest credit ratings.
Those in the position of a discharged Chapter 7 bankruptcy will have lower credit scores, at least for a while. There is no magic number, but 2 to 3 years is typical as your credit can greatly improve if you maintain on-time payments. There are other things you can also consider. Larger down payments, purchasing a cheaper home, and asking someone to co-sign are options you can explore. If your credit rating is too low, make sure the debts that were included in your bankruptcy are no longer being reported by the credit bureaus in error. You can also embrace responsible credit practices after filing bankruptcy to demonstrate that you are faithfully repaying money on time. This practice includes making timely payments in the required amount, and not carrying balances over 30% of the credit limits. Doing these things will improve your creditworthiness.
If You Haven’t Filed Bankruptcy, There is a Better Option
A better solution than filing bankruptcy comes from an unexpected source. Jed Shaw is a bankruptcy attorney in Houston who offers an alternative to Chapter 7 or 13. His office sends Cease & Desist letters to all unsecured creditors, and works within the statute of limitations on debt in Texas until debts are noncollectable. Creditors are obligated to discontinue contact upon receipt of the letter and his representation. Harassing phone calls stop, and this without filing for bankruptcy.
His law firm is the only Texas law practice, and possibly the only law firm in the country to base reasonable fees upon varying factors that produce the results of bankruptcy without the credit mark of one. Those factors include the amount of debt, number of creditors, and which companies are trying to collect a debt. The only fee paid by the client is the lawyer’s fee. Shaw’s firm does not “settle” with creditors like debt settlement firms.
An option to work with a nationwide credit repair company that has many years of experience is also an option once his work is done. It takes between seven months and a year to wipe all derogatory items clean from your credit report. The fees the company charges will be reasonable if they are abiding by the rules.
Why Get Help from Jed Shaw
The reason Jed Shaw makes the above options available is that filing bankruptcy is a permanent public record. You have an obligation to answer any question about filing bankruptcy before making that decision. Another important reason is the seven and a half year limit for filing bankruptcy again. If the need arises due to a horrible accident or million dollar lawsuit filed against you, your opportunity to file bankruptcy will no longer be an option for you.
There is good and bad advice available to those considering bankruptcy. By putting your matters into the hands of Jed Shaw’s firm, you can benefit from a wealth of experience. Jed is a civic minded professional who is competent in matters of law. He served as a mayor and judge in the state of Texas. He will listen to your unique financial situation. Jed Shaw, Esquire, presents all legal options including Chapter 7 bankruptcy can advise you the best route to take before buying a home. In his tenure, some of his past clients included some of the country’s largest lenders. This information gives him a valuable vantage point when advising you about your options. Call him at 713-750-9038 for a free consultation today.