Trying Buy a house wondering about Bankruptcy

[Anonymous]

My spouse and i want to purchase a house, are credit is not so good...we have some debts from past mistakes totaling about $15,000. We are considering Banruptcy. Can you tell us if we will still be able to purchase? We have tried going to a bank to get a consolidation loan, but we were denied...I need some answers...dont know what to do...we only make about $42,000.00 together...I desperate. Thanks.

[Anonymous]

Not sure if this is the right time to be thinking about a home purchase, honestly. If you do end up with the BK you're going to need a discharge and some time to elapse before a lender feels comfortable with you. Even then, fresh out of discharge and you're going to be hard pressed to get any kind of decent loan for about 2 years. If I were in your boat I would devote some time to post-BK healing and maybe build a little credit back before you go for such a significant purchase. But before all of that, consider if BK is even a good idea. $15K feels like a lot when you're broke, but most people carry around more debt than that in just a single car loan. Avoid if you can. Best of luck.

Message Edited by devhip on 05-16-2007 10:11 AM

[smallfry]

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@Anonymous wrote:
Not sure if this is the right time to be thinking about a home purchase, honestly. If you do end up with the BK you're going to need a discharge and some time to elapse before a lender feels comfortable with you. Even then, fresh out of discharge and you're going to be hard pressed to get any kind of decent loan for about 2 years. If I were in your boat I would devote some time to post-BK healing and maybe build a little credit back before you go for such a significant purchase. But before all of that, consider if BK is even a good idea. $15K feels like a lot when you're broke, but most people carry around more debt than that in just a single car loan. Avoid if you can. Best of luck.

Message Edited by devhip on 05-16-2007 10:11 AM

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Avoid BK at all costs.

[Anonymous]

Thanks for your advice...Well, that's my problem im not sure if I should apply for bankruptcy...Another if it will take about 2 years to recover, I may as well try to pay off my credit...I feel like im in a lose lose situation...Can you shed some more light? I appreciate any advice you can give.

[Boswd]

Yeah when we get ourselves into debt it is always a lose lose situation, but you're not alone.   $15,000 does seem like alot but I don't think it's enough to want to claim bankruptcy, the consequences far outweigh the benefits.   If they aren't in Collections yet you need to call your creditors ASAP and just try to work out something that is reasonably fair to paying them off.   Buying a house should not be even a thought, if you can't get your current debt a little more under control.   I would totally put that on the back burner and get caught up otherwise you could be setting yourself up for major financial ruin.   You think $15,000 is alot, think about what having a mortgage will feel like. Especially if you are struggling to pay off your current debt.  If you couldn't get a personal loan with your bank, then you would have to go through a sub prime lender and you'll be paying interest rates through the nose for a mortgage.  

I suggest take care of current debt and then revisit purchasing a house at amuch later date when things are under a little more control. 

[Anonymous]

I've been exactly where you are sitting. In fact, I took it one step further and paid the filing fee. After talking to the court referee I had a change of heart and asked the court to dismiss. I had much more debt than you. I know, it's very scary and overwhelming. Where to start, right? $15K is very do-able. I can tell you what I did. Not saying that it's the best, or only way. It's just what I did. First, salvage any accounts that haven't gone entirely bad, if you can. Make the calls. That was hard for me, and humbling. If it's too far gone and the debt has been sold off to a collection agency, forget that advice. Put it on the backburner (unless there's pending legal action) and tackle higher priority accounts. However if it's still sitting with the original creditor, be honest. Tell them that you are on the verge of filing BK but that you'd like to avoid it. "I can offer you XX$ a month towards my balance. I realize that it's not the entire payment, but it's the absolute best I can do right now and I'd really like to stay on favorable terms with your company." If they bend a little to accommodate you, absolutely, without fail, hold up your end of the deal. If you don't they will come at you with a vengeance. I learned that the hard way. So don't say it if you can't do it. Sometimes a settlement is a good option. I initiated settlements with a few pretty big accounts ($2K to $12K) and settled for an average of 30%. That requires scrimping together the cash which I know is very hard. I pulled mine by borrowing from a supplemental retirement fund. Generally not a good idea, but for me it was a lifesaver. The point is, exhaust every option before you file. Again, just my point of view. If you can pull through it, you'll come out it a more enlightened, stronger, and more responsible person. When you have to fight through your debt as opposed to writing it off and claw your way back up as many of us here have, believe me....you will revere and respect your credit. Then you can go for that house with confidence.

Message Edited by devhip on 05-16-2007 02:48 PM

[smallfry]

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@Anonymous wrote:
I've been exactly where you are sitting. In fact, I took it one step further and paid the filing fee. After talking to the court referee I a change of heart I asked the court to dismiss. I had much more debt than you. I know, it's very scary and overwhelming. Where to start, right? $15K is very do-able. I can tell you what I did. Not saying that it's the best, or only way. It's just what I did. First, salvage any accounts that haven't gone entirely bad, if you can. Make the calls. That was hard for me, and humbling. If it's too far gone and the debt has been sold off to a collection agency, forget that advice. Put it on the backburner (unless there's pending legal action). However if it's still sitting with the original creditor, be honest. Tell them that you are on the verge of filing BK but that you'd like to avoid it. "I can offer you XX$ a month towards my balance. I realize that it's not the entire payment, but it's the absolute best I can do right now and I'd really like to stay on favorable terms with your company." If they bend a little to accommodate you, absolutely, without fail, hold up your end of the deal. If you don't they will come at you with a vengeance. I learned that the hard way. So don't say it if you can't do it. Sometimes a settlement is a good option. I initiated settlements with a few pretty big accounts ($2K to $12K) and settled for an average of 30%. That requires scrimping together the cash which I know is very hard. I pulled mine by borrowing from a supplemental retirement fund. Generally not a good idea, but for me it was a lifesaver. The point is, exhaust every option before you file. Again, just my point of view.

Message Edited by devhip on 05-16-2007 02:40 PM

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Great advice. Remember the stink of BK stays on you for 10 years. Worst case with these if you can get them to work with you is much less time than that. BK was by far the worst thing I ever did. 3 more years left for me and it feels like an eternity already. Make the calls. In a couple years you'll see it was the right decision. Good luck. Hey try to save a little for the house before buying.

[Tuscani]

Bankruptcy: Chapters 7, 11, and 12 remain for 10 years from the filing date. Chapter 13 remains seven years from the filing date. Accounts included in bankruptcy will remain seven years from the date they were reported as included in the bankruptcy.

[Anonymous]

You probably have a lot more options than you know. Find a wealthy person near your home town-best bet find a real estate investors meeting ante up around $10-15 for the door fee and ask the person running the meeting to refer you to some one who really understands money. Then show them your budget and ask for suggestions. Your problem could be cured with a small bit of extra income from a sideline or by cutting some expenses. I know you could just go to a credit counselor, but most of them are not personally wealthy, because they don't truly understand time and money. I suspect most of them couldn't pick up a calculator and figure the present value of a future stream of income and expenses at a given interest rate.

[Anonymous]

Man! Now I can say that sounds like some really genuine and honest advice along with some great wisdom! I mean everything you just said make so much sense, I could just scream, because I have so much insight now that you haved helped me with. I will just work at paying my bills and maybe look to buy in 2 years, confidently. Thank you for That and God Bless you! You have helped me more than you know! Peace Dluellen