A bankruptcy filing delivers a devastating blow to your credit and FICO score, but it doesn't mean you have to wait 10 years before you qualify for a mortgage. My 123 Mortgage.com enables many consumers who have filed for bankruptcy obtain a mortgage.
A Chapter 7 is like a "turn and burn" for lack of better terms. List the creditors you cannot pay, and with the assistance of an attorney, the list is filed with the amounts owed with the court. There is a holding period and then a discharge. Most lenders will not lend to you until it is discharged.
A Chapter 13 is more favorable in the eyes of the lender, simply because this is a rearrangement with the intent of actually paying the debts. As the consumer, you still list the creditors that you simply can't keep up with, but instead of just writing them off, you are required to make regular monthly payments in good faith and in return, the creditors back off from their collection from you because they are receiving payment in part or in full from the proceeds you send to the appointed court official. After a given time period, you are discharged from Chapter 13 just like any other bankruptcy.
We will need both the filing papers and discharge papers if the bankruptcy is within 5 years. IF YOU ARE NOT YET DISCHARGED, and you happen to be in a Chapter 13, my123 Mortgage actually has the power to arrange a desireable mortgage and "buys out" the Chapter 13.
In case you missed that, YOU CAN BUY OUT YOUR CHAPTER 13 with a refinance!
THERE IS LIFE AFTER A BANKRUPTCY
Remember that the credit reporting agencies are only reporting what the creditors report to them. Having said that, many creditors simply do not report correctly, especially during and after a bankruptcy. It is important that as you read the steps below, you remember that your credit report will need to be accurately updated. We are commited to doing that with you so that you can eventually get the home loan you want and deserve.
Here's how we can help:
The Two-Step: There are many lending sources that provide mortgage financing for someone with a damaged credit history. It is not uncommon for someone in this situation obtain a mortgage with us--consider an interest only mortgage-- pay 12 months exactly on time, and then refinance into a lower rate/payment mortgage.
We offer people like you who are recovering from bankruptcy and other credit-damaging events the chance to strengthen your credit. During the 12 month period discussed above in The Two-Step, we work with you to repair what may be damaging your credit scores and offer budgeting tools to help you manage your money better right NOW. Keep reading:
Dispute any credit report errors. Theres no need to add to your troubled credit history with errors on your credit report. Get a copy of your credit report from each of the three major credit reporting agencies: Equifax, http://www.equifax.com Experian, http://www.experian.com and TransUnion, http://www.tuc.com. Then:
TAKE A VERY GOOD LOOK. Unsure what it all means? Email us. We have the experience to help you write effective letters to the credit reporting agencies to remove inconsistencies and inaccurate payment histories.
Demonstrate good money habits now. Many people who file bankruptcy swear off credit altogether, however, it is important to re-establish your credit. We will advise you when to get a secured credit card or take on some sort of loan furniture, a car or a major appliance to demonstrate that you are able to make timely payments. Make sure you MAKE PAYMENTS ON TIME. You won't turn things around in a year but your credit score will improve over time.
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RECOVERING FROM BANKRUPTCY
Get a copy of your credit report from each of the three major credit reporting agencies: Equifax, 