Bankruptcy Doesn't Make Home Ownership Impossible
Quality lenders don't advertise a willingness to do business with people who have filed bankruptcy. That come-on usually comes from finance companies and subprime lenders who will lend to practically anyone as long as they'll pay anything to get the loan.
It's important to realize that predatory lenders are not the only alternatives you have.
No question, there are some people who emerge from bankruptcy with credit histories that are a disaster: below-500 credit scores, foreclosures, repossessions, and all sorts of terrible credit experiences that linger long on the three credit histories that exist for everyone. Some of those people might be in and out of bankruptcy repeatedly.
Lenders want to see a U.S. Bankruptcy Court discharge letter before they'll consider your application, and they definitely want to see a year or two pass after the date on that letter before you apply for a loan. That way, they'll get a chance to see how you've been handling credit and bill payments over a consistent period of time.
The world of bankruptcy for most people is a horrible, shameful nightmare because they never intended to become people who couldn't pay their bills. Yet into that picture of guilt and shame can creep misconceptions, and people emerging from bankruptcy need to understand what is truth and myth and be proactive about rebuilding their credit.
There is no “common” bankruptcy. Your credit picture depends very much on your credit history before you filed, and your credit picture depends on the moves you make afterward.
