Many Michigan consumers who are on the verge of filing for bankruptcy worry that their ability to own a home will be stifled for many years to come. A recent report indicates that this is not the case, and that individuals can be back in the market for a new home within the first few years of a foreclosure or completed Chapter 13 bankruptcy. This is good news for many who are overwhelmed by debt but still hold aspirations to achieve the American dream of homeownership.
As with any long-term goal, the key is proper planning. As soon as one's bankruptcy is final, the focus should be on establishing and properly maintaining new lines of credit, no matter how small. By establishing a solid credit history an individual can begin to overcome the credit damage done by the bankruptcy, and also build a history of making timely payments. These factors will weigh heavily once it is time to apply for a new mortgage.
As for the timeline, lenders assert that a borrower can qualify for some types of loans as soon as one year following a bankruptcy discharge. Typically that timeframe is closer to three years. The length of time largely depends on the type of loan one is seeking, as different lenders have their own guidelines.
When an individual in Michigan is faced with a seemingly insurmountable load of debt, the most financially viable option can be a personal bankruptcy filing. Such a choice will not only wipe away a large portion of consumer debt, it will also provide the filer with an opportunity for a clean financial slate. What one does with that opportunity is the key between success in future homeownership or simply the accumulation of new unmanageable levels of debt.
Source: Yahoo! Finance, "Buyers Are Back After Foreclosure," Conor Dougherty, Oct. 14, 2012