current homeowner, discharged from ch 7 1 year ago, is buying a new home possible?

[taresa21]

My husband and i were under the understanding that we were stuck in our current home for the next 7-10 yrs due to our ch 7 bankruptcy. We saved our house and all of our possessions and only cancelled debts. We have been rebuilding credit, always in good standing with our mortgage company, have two credit cards in excellent standing and really no other debts. No car loans and nothing other than household utilities. ive tried searching online to see what a good timeline is for buying a new home or how it works after bankruptcy but cannot seem to find anything pertaining to those who are current homeowners and did not put the home under the bankruptcy. We have owned this home for almost 6 years, fell behind during hard economic times and a legal separation, partial job lay offs (also the cause of the bankruptcy) but caught up and have been current for almost 3yrs now. any info on this issue would be great thanks in advance

[keepsmiling]

Hi and welcome to the forum!
You shouldn't have to wait as long as 7-10 years! You are probably looking at another year or two. That long time frame is how long it will take for the bk to drop off your credit report.

HOWEVER-- I think you misunderstand how bk works. ALL of your debts were included, including your home. Unless you reaffirmed it, you are under no obligation to continue paying the mortgage ... except for wanting to continue living there lol. Do you know how the mortgage is being reported on your credit report? It might be worth taking a look.

[taresa21]

HOWEVER-- I think you misunderstand how bk works. ALL of your debts were included, including your home. Unless you reaffirmed it, you are under no obligation to continue paying the mortgage ... except for wanting to continue living there lol. Do you know how the mortgage is being reported on your credit report? It might be worth taking a look.[/QUOTE]


Not quite sure what reaffirming means, i do know that when we met with our attorney we specifically asked that our mortgage was not included, i remember him asking us if there was anything we wanted to leave out or keep paying on, we had our house and a kirby vacuum that was on our credit. I do know that our mortgage is on our credit report, we got paper work when we first filed from our mortgage company and we had to call each month to pay our mortgage instead of sending a check or paying online, dont quite remember why they made us do that but we also had to send our discharge paperwork into them when it was finished. i saved all the papers of course stating our mortgage was not included in that

[LadyInTheRed]

Whether or not you keep your house and continue to pay your mortgage, the mortgage is still "included" in your BK. Your personal liability for the debt was discharged unless you reaffirmed. Reafirming means agreeing that a debt will not be discharged in the BK. To reaffirm the mortgage, you would have had to sign a reaffirmation agreement that would have been filed with the court. It is very important that you know whether or not your mortgage was reaffirmed. Check your discharge order to see if there is any mention of the mortgage or ask your attorney whether you reaffirmed the mortgage.

[keepsmiling]

The q your lawyer asked you was whether or not you wanted to "surrender" the house. Regardless of whether you did or did not, your contractual obligation to the bank became moot upon filing. You would know if your reaffirmed or not because there would have been separate paperwork for that.

Keep reading here, soon you will have a much clearer understanding of the very confusing world of bk. Lots of great knowledge to be gained.
Just curious.... is your house underwater? In other words, what is your current balance and realistic estimate of house value?

[keepsmiling]

Oops we posted at the same time. OP, listen to LITR. She is one of the most knowledgeable people on the boards.

[taresa21]

Our original mortgage was exactly 100000 and our last statement we received, the value of home and property was only 78,000. Kinda depressing really, im going to look at my discharge papers, i know we wanted to everything we could to keep out mortgage out of our bankruptcy so i need to look it over again.

[taresa21]

I do remember signing some kind of papers regarding our mortgage company and the bankruptcy...just dont remember exactly what it was...we did this pretty blindly, knowing it was our only option to rebuild

[taresa21]

Ok found it. The only paper regarding out house says that the property will be retained and it was claimed as exempt. So what does this mean in terms of being involved in our BK and future home loans...this was/is our first home

[Logan]

Minimum 2 years out of BK to get a FHA loan if you have a Ch.7. A foreclosure adds another year. I just bought a home 5 years out of BK and had no issues getting approved.
Logan

[Floridagail]

Since you did not reaffirm, You legally owe nothing on your house, ( but it is still in your name) So you need to get rid of it, to be able to buy another most likely.

[taresa21]

I am still confused geez....i did look up some passed documents and at the time we filed for bk our mortgage company required that we signed up for mortgage insurance, something we didnt have before. Our names are still on the liens, escrow and all of that. I dont understand the difference in our house being exempt and reaffirming

[Floridagail]

Exemption in bankruptcy protects your home equity from creditors in a Chapter 7.

A reaffirmation agreement is an agreement where a debtor chooses to become legally obligated again to pay all or portion of a debt which would be discharge.

[keepsmiling]

To clarify... exemption protects some or all of your equity in home or other things owned such as cars, household goods, cash on hand, stocks... this varies from state to state, with some states being quite generous and others rather stingy.
Since you have no equity in your home, it was never an issue. If you had too much equity, the trustee may have taken your home.
Not an issue for you, but you definitely should be clear on what's what.

[eener]

I know this is old, but just because you didn't reaffirm doesn't mean that you should stop paying your mortgage. If you want to buy a house, keep paying and never be late. You can buy a house as early as 2 years from your discharge. This would only be possible if you are current on the payments for the home you are in now and can also afford the new mortgage payments. You could technically walk away from your current mortgage after you close or you could keep your home and rent it to cover the mortgage payment. It could take years for the bank to foreclose and it takes 3 years from the date the bank gets the deed in their name before you can buy another home. If buying a new home as soon as possible is your goal, then don't stop paying on your home.

Also, if you only owe $100,000 I doubt you could find rent any lower than your current mortgage payment.

Good luck!