A lot of people go through the same thing, that is, when they are behind for a couple of months on their home, they just want to walk away and declare bankruptcy. What they do not know is that they will be very much affected by bankruptcy if they decide to buy a home again the next time they think they are able again. When you declare bankruptcy, it would take at least two or four years on a case to case basis.
If it was for a medical emergency or something like of hardship, they might take it about two years or even longer from a lending standpoint. Bankruptcy remains for about to two to four years.
If the reason was because of overspending or mismanagement of funds the lending rules at least about four years. But if what one should do is that if he is working the first thing he should do is communicate with his mortgage company and tell him what is going on so that he can still salvage the house.
Remember that disregarding this responsibility and declaring bankruptcy will affect his credit. And even if he wants to go and rent they will discover his credit report and demand of him a substantial security deposit and may even turn him down. Declaring bankruptcy has an effect when he tries looking for another job or even taking on an insurance policy.
To avoid even thinking of declaring bankruptcy one must know the truth about it. As already said, people who are not able to pay up for a couple of months on their home always consider of bankruptcy so that they walk away from it. The misinformation out there is that they can only be helped only if they are current which is not true. The fact is that if you are current, you have a good chance of getting helped, whereas if you are behind then you will even have to worry about legal fees and penalties.
The best thing to do in such situation is to call your and call your lender and tell the truth so that they can work with you. Keep in mind that the first person you talk is not always the person who will help you through your ordeal. You have to keep on looking up to the real person who will be able to assist you in this regard.
Although some would say that declaring bankruptcy may have a positive effect, that is, you are able to evade paying off your debts, thus giving you freedom. It also creates freedom in a sense that you are no longer ran after by lending agencies and forcing you to pay up. That may be the case, but the effect of bankruptcy somehow dictates how establishments will view your credit standing when you are already trying to make a good life for yourself. Also, they will judge you as to what kind of person you are. Knowing he effect of bankruptcy on one’s capability to buy a home for himself is important to consider first before making that decision.
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Author: clavinee
Lots of good information.
ReplyDeleteFollowing from MBC.