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When you want to file for bankruptcy, it’s imperative to understand all the implications of this process. Though there are undeniable financial impacts those filing for bankruptcy will experience, this can offer a fresh start to help you regain control of your finances. If you’re considering this option, it’s essential to understand how this could affect your ability to obtain a mortgage. The following blog explores what you must know surrounding these circumstances and how a Memphis, TN consumer bankruptcy lawyer can assist you during this complicated legal matter.

How Will Bankruptcy Impact My Ability to Get a Mortgage?

When you file for bankruptcy, whether this is Chapter 7 or Chapter 13, you can expect your credit score to suffer for years at a time. Unfortunately, bankruptcy can significantly lower your credit score for 7 or 10 years, depending on the chapter you file.

As such, a lower credit score and the presence of bankruptcy on your credit report will likely make lenders less inclined to extend a loan. However, this does not mean you will never be able to receive a loan. Some lenders do still work with those who have filed for bankruptcy, but only after the bankruptcy has been discharged and after a waiting period. In most instances, this is a minimum of two years.

What Are My Options After Bankruptcy?

Generally, you may be able to take out Federal Housing Administration (FHA) loans, U.S. Department of Agriculture (USDA) Loans, or Veterans Affairs (VA) loans. However, you must meet the eligibility requirements, such as living in a rural area or participating in military service. Depending on the type of bankruptcy you file and the loan you apply for, you will generally wait one to two years following the discharge date before you can apply for a loan.

If you do not meet the eligibility requirements, you may be able to receive conventional loans for your mortgage. However, these have longer waiting periods, sitting at four years from the discharge date for Chapters 7 and 11, or two years for Chapter 13.

What Should I Do if I Need Help With Bankruptcy?

If you are considering bankruptcy, it’s imperative to contact an experienced attorney as soon as possible. Unfortunately, you may find that this process is incredibly complex. However, a lawyer can help you navigate the filing process to ensure this process goes as smoothly as possible.

At the Arnold Law Firm, we understand how complex these matters can be. Unfortunately, bankruptcy can have impacts on your life if this process is not completed and navigated with care. As such, it’s imperative to ensure you have competent legal representation on your side. Our dedicated team will do everything possible to help you through these complex times. Contact us today to learn how we’ve helped others across Tennessee and how we can help you.