After Bankruptcy Tips | Bankruptcyfilingfees

Bankruptcy Myths #1: If I file for bankruptcy, I will lose everything.

This is a common misconception that keeps people who really should file for bankruptcy from doing it. Federal and Michigan laws provide exemptions that can protect (up to a certain value) assets, such as your house, your car, money in qualified retirement plans, household goods and clothing. For most people, they’ll lose nothing in the bankruptcy process!

Bankruptcy Myths #2: If I file for bankruptcy, I will never again be able to buy a house or a car.

Many of our clients are able to obtain new cars after completing the bankruptcy process. However, each lender varies in their business practices so you may need to shop around. Lenders take other factors into account as well, such as current employment, current income, and credit history.

To purchase a new home it usually takes a bit longer. It typically takes about two years to get a house after you file for bankruptcy.

Bankruptcy Myths #3: If you’re married, both spouses have to file for bankruptcy.

If one spouse has a significant amount of debt in their name only, it may make sense for only one spouse to file. However, if there are joint debts then it may be prudent for both spouses to file. If there are joint debts and only one spouse files then the creditor may still attempt to collect the debt from the non-filing spouse.

Bankruptcy Myths #4: I won’t ever be able to get credit after my bankruptcy.

Many of our clients are shocked by how quickly they’ll start getting credit card offers in the mail again. By opening a new credit card and habitually making on-time payments your credit score will quickly improve beyond pre-filing levels. Please see our credit repair kit to view other ways to increase your credit score. We help our clients increase their credit scores through bankruptcy. It’s also important to monitor your credit score.

Bankruptcy Myths #5: People who file bankruptcy are financially irresponsible.

There are a multitude of reasons that people need to file for bankruptcy, many of which are out of their control. Often it is because people run into very serious personal problems such as a job loss, serious medical issues, or a divorce. Unemployment, the cost of running two households following divorce, or the cost of medical care have all driven well-intentioned Americans into bankruptcy. It’s financially irresponsible to avoid your creditors, ignore your bills and drive yourself further into debt. Millions of well-intention-ed Americans have filed for bankruptcy and come out stronger and more successful!

Bankruptcy Myths #6: You can’t get rid of back taxes in Bankruptcy.

Certain federal, state and local taxes can be discharged under the bankruptcy laws. There are several qualifications that must be met, but once these are met, the taxes may be discharged.

Bankruptcy Myths #7: It’s really hard to file for bankruptcy

Although there were new laws enacted in 2005, the new laws were drafted to prevent fraud and bankruptcy abuse.

Bankruptcy Myths #8: Everyone will know you have filed for bankruptcy.

It is unlikely anyone will know that you have filed for bankruptcy unless you tell them. While bankruptcy is a matter of public record, someone would have to specifically track down the information using your personal information in order to find out if you filed for bankruptcy.

Bankruptcy Myths #9: You can’t afford to hire an attorney.

At Firebaugh & Andrews , initial consultations are FREE! Money is never a reason we turn clients away. We pride ourselves on our flexible payment plan options which can be customized to your unique circumstances. In our experience, the worst thing a client can do is obtain legal advice from the internet, co-workers, family or friends.

Bankruptcy Myths #10: There is a minimum amount of debt required to file for bankruptcy.

There is no minimum amount of debt required to file for bankruptcy. Every situation is unique.

Call Firebaugh & Andrews today for your free consultation 734-722-299

There is hope still for those that have had a recent bankruptcy on their credit and who still wish to buy a home, but it may require financing to own the house. One should realize that all is not lost when it comes to learning how to buy a house after bankruptcy. The effect of having bad credit is that it only serves to put more emphasis on the other two factors governing how to buy a house after bankruptcy, which are income verification as well as a down payment.

You Must Wait Two Years Following Bankruptcy if one has become bankrupt, lenders normally require the borrower to wait for a minimum of two years from when he or she went bankrupt before making their application for a mortgage loan. Once this two years waiting period has been served out, lenders will normally offer loans and finance should not be difficult to obtain.

Of course, it does require affirmation from the credit bureau to attest that the debtor’s payments have been paid on time after the discharge of his or her bankruptcy. However, if the debtor wishes to obtain a mortgage loan prior to the two years waiting period having been completed, he or she will need a flawless payment history from the time of his or her bankruptcy discharge.

Thus, how to buy a house after bankruptcy will require having a good and certified credit standing that has been consistent ever since the bankruptcy was discharged, and it may even be helpful if the debtor is able to pay a down payment, which even as small an amount such as three to five percent as a down payment will help to further the cause adequately.

Other methods open, when one is considering how to buy a house after bankruptcy, are to borrow or ask for a gift from relatives. Having financed a house, it is always possible to go and take out a second or third mortgage up to the total value of the house, and then pay back the loan from relatives. However, one should always be honest with lenders about the source of the down payment; otherwise dishonesty could lead to it being treated as defrauding the lender.

Another option one can consider regarding how to buy a house after bankruptcy is down payment assistance programs such as Neighborhood Gold or the Nehemiah program, which basically aid sellers in helping the debtor with down payments. It is legal to receive a down payment from these sources but it is illegal to receive down payments from the seller of the property.

Finally, with regard to how to buy a house after bankruptcy, one may also consider cashing out a 410K or another investment, and repay with a second or third mortgage after the loan gets closed. These days, mortgage loans following bankruptcy are not so hard to come by, and there are many bad credit mortgage lenders who will provide loan assistance in this regard.

Call Firebaugh and Andrews for a free evaluation today at 734-722-2999

Category Archives: After Bankruptcy Tips

If you file bankruptcy will you lose everything? 10 bankruptcy myth busters