can't get an apartment!

[SeekingZero]

I initially wanted to keep my home following a separation and now soon to be a divorce. The separation forced me to file CH 7. However, now I'm regretting that I kept the house, and wish now I had sold the house, paid of my car, and then found an apartment for a few years, filing only after I got a place if absolutely necessary. Now I'm stuck in a town I hate, surrounded by a constant reminder of what I once had, and I'm slowly losing my mind. Its been a month since the discharge, which is great, but now I'm realizing just how "trapped" that has made me. I'm not feeling the free feeling I thought I would feel. The soonest I can get a mortgage again is 2 years, probably 5.

I've tried renting an apartment, they must be laughing at me because the BK is disqualifying me from passing their "credit check". Everyone requires a credit check, and some have been so upfront as to say if you show a bankruptcy, I' won't rent to you no matter how long its been. They just shred the application, on top of that they ask YOU to pay for the credit check. Even the slum lords want a credit check. They don't care that your wife stabbed you in the back and walked out one day with no notice, leaving you with a pile of debt and on top of that wants MORE from you.

Really wish I has thought this through- a guess a word of advice, if you are going through a divorce please, strongly consider selling the house instead of bankruptcy, cause you could end up trapped for years...

[bcohen]

I don't know where you live, but it must be a VERY competitive housing market if bankruptcy is an automatic disqualification to renting an apartment. Here in southern Arizona, as long as you meet the income requirements and have acceptable rental history, a bankruptcy would not be a problem. I had no difficulty qualifying for a different apartment approximately 1 year after discharge; I had been in the previous apartment for 7 and a half years when I started looking to move. I had never rented anywhere else before that.

That being said, I am not sure it makes sense to move into an apartment now, and be forced to pay rent right away. You could just as easily stay in your house payment-free and let the bank foreclose. You could choose to take steps to slow down the foreclosure, which would buy even more time. You might be able to live in the house for a year or more, without paying the mortgage/insurance/taxes, and bank that money instead. Then, when the time comes to move, you will have plenty of money to put down, and have distanced yourself from the bankruptcy discharge.

[SeekingZero]

I'm in vermont- chittenden county, and it is competitive. Houses are 300k for 2 bedrooms, and apartments are 1,900 a month for a nice 2 bedroom. Dumps are 1200 a month. I guess have to stay in the house. I have just enough equity that if I sold now I'd have about 5k. If I stop paying I'll have about 15k saved up in a year. What I'm concerned about is not ever being able to buy a house again if I go into foreclosure. If the foreclosure shows up on a credit report post BK discharge, and will push back how much longer I have to wait for a new mortgage loan, I'm not sure I would go for that. I have read that possibly within 2 or 3 years I could buy a home again, but that somehow requires not going into foreclosure or missing payments. I'm not sure I understand since the mortgage is gone. It doesn't make sense. Even if it is gone, and doesn't show upc a new lender may just ask on a application if you have been foreclosed on. Answering honestly, I'm sure that is worse.

[bcohen]

What I'm concerned about is not ever being able to buy a house again if I go into foreclosure. If the foreclosure shows up on a credit report post BK discharge, and will push back how much longer I have to wait for a new mortgage loan, I'm not sure I would go for that.

Once you have discharged personal responsibility for the mortgage loan through Chapter 7 bankruptcy, the lender cannot report any further negative information to the credit bureaus. This means that if you default on the loan and the bank has to foreclose, they cannot report late payments, foreclosure, charge-off, or deficiency balance. Your credit reports should show the mortgage (and all other discharged debts) as "account included in bankruptcy" and $0 balance owed. Depending on how long ago the discharge was issued, it may take some time before the accounts are all updated.

The waiting period for being able to qualify for another mortgage will be based on the discharge date, regardless of whether or not there is a subsequent foreclosure. Assuming that you are able to meet the debt-to-income standards, you would be able to buy a house again.