Thomas F. Miles, Attorney and Counselor at Law
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Is it possible to buy a home after Chapter 7 bankruptcy?

When financial struggles arise, the primary concern of many California homeowners is their ability to retain their home, or the chances of purchasing another property in the years to come. In many cases, the only course of action that makes financial sense is to file for Chapter 7 bankruptcy. That process will lead the home to go through foreclosure, which many homeowners wrongly assume will prohibit them from purchasing another home down the line.

This however, is simply not the case. It is possible to buy another property after going through Chapter 7 bankruptcy, it just takes an extra degree of effort to do so. The first part of that process involves waiting for the current property to go through the foreclosure process. This can take time, especially if the lender is handling many foreclosure cases at one time. However, the timing of the foreclosure and trustee sale date of the home is essential, since this is the starting point of a mandatory three-year waiting period before an individual will become eligible for a new mortgage.

After three years have passed, prospective borrowers can obtain a government-backed home loan. Doing so will require that the applicant prove that he or she has established a positive credit history in the timeframe since filing for bankruptcy. It is also helpful to be able to explain the reason behind the previous property going into foreclosure. Those who lost their home and sought bankruptcy due to a sudden job loss or medical issue can have those factors placed into consideration by the new lender.

When considering one's options, it is essential to have the proper information. Many California homeowners believe that, once they have gone through a Chapter 7 bankruptcy and foreclosure, they will be unable purchase a new home. In reality, however, many people move beyond a serious financial setback to achieve many of their financial goals, including owning a home of their own.

Source:, "How to Get a Mortgage When You've Been Through Financial Hell", Scott Sheldon, April 30, 2014

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Thomas F. Miles, Attorney and Counselor at Law
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