Most of the news and writing about bankruptcy deals with advising people on how to keep their homes. This has been especially true for those considering filing a Las Vegas bankruptcy after the housing bubble burst. Foreclosure defense has been a big issue for bankruptcy attorneys, as has stripping mortgages. However, many people who file bankruptcy aren’t homeowners but wish to become ones someday. What about them, the renters?
Fortunately, debtors who rent won’t be banished from home ownership forever. Here are the 6 things bankruptcy can do to put you back on track to home ownership.
(1) Know now that whatever damage your debt has done to your credit worthiness is done. Avoiding bills will not make things better. Filing bankruptcy—or just negotiating your debt—will actually improve your credit score in the long run.
(2) Discharge will help. By the time people consider filing a Chapter 7 bankruptcy, much of their after-tax income goes to debt payments. The accrued interest that gets tacked on to debt will be a burden on your income going into the distant future. By discharging your debt, you can begin saving anew.
(3) A payment plan can help too. Many people choose, or because their incomes are too high have no choice, to file in Chapter 13. With the three-to-five-year repayment plan that you agree to, and the discharge at the end, you can save for a house.
(4) For student debts, Income-Based Repayment (IBR) is your best friend. This fairly recent program allows you to have some discretionary income left over after paying for government loans. Another issue to look into is to see if your student loans have any provisions that allow co-signers to be released after a certain number of years.
(5) Bankruptcy will help you deal with auto loans. In Chapter 13, for instance, you may be able to “cram down” the remaining principal on your car loan, which can save you money.
(6) Government programs facilitate homeownership. For example, government enterprises such as Fannie Mae or Freddie Mac have lower down payment requirements than most other lenders. Using one of these programs after can ease your path to home ownership.
Many Americans still dream of home ownership, and even after filing bankruptcy, it’s still possible to achieve.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation. Call us at 702-880-5554 to set up your free consultation.