Thomas F. Miles, Attorney and Counselor at Law
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Buying a home after going through personal bankruptcy

Owning a home remains one of the top goals of many Americans. For those who are forced to file for personal bankruptcy, that dream may seem out of reach, especially if they have lost their home as a result of financial distress. It can be a huge relief for California residents to learn that purchasing a new home may not be such a challenge after all.

Fannie Mae has changed the rules for borrowers who have gone through a short sale or foreclosure. Previously, all homeowners who lost their home through foreclosure had to wait seven years before purchasing a new home. That timeline has been reduced to just two years after a short sale and three years after a foreclosure. The new rules only apply to borrowers who were subject to extenuating circumstances that led to the loss of their home. Examples include the loss of a job and major medical expenses.

For those who wish to take advantage of the chance to own another home, it is important to take a proactive stance in the matter. Credit repair efforts should begin immediately following a foreclosure or short sale. Money management training can also be of assistance in teaching borrowers how to handle their money in a more responsible way. When the time comes to shop for a new mortgage, it is imperative to avoid falling victim to predatory lenders, who often target individuals who have gone through previous financial strife.

With the right amount of effort and motivation, California residents can move beyond a short sale or foreclosure and purchase another property down the line. For some, personal bankruptcy will play a role in their own financial recovery process. Each person's path is unique to his or her particular set of circumstances, and those with questions about the pros and cons of bankruptcy should schedule a consultation with a bankruptcy attorney to learn more.

Source:, "5 tips to bounce back after a foreclosure or short sale", Deborah Kearns, Aug. 11, 2016

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Thomas F. Miles, Attorney and Counselor at Law
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