Can I buy a home after bankruptcy in New York City?


People considering bankruptcy are often surprised when we tell them that they can buy a home after bankruptcy and that sometimes filing for bankruptcy can even make it easier to buy a home.  In fact, for some people it’s actually the fastest path to home ownership.  If you are just learning about bankruptcy in New York that might seem crazy, but here’s basically how it works for our clients.


Once you complete your bankruptcy, you are debt free.  No more harassing communications and no threats of lawsuits or wage garnishments.  It’s refreshing to say the least, and with your regained financial freedom and independence you might be ready to finally buy a home of your own.

In order to qualify for a home loan after bankruptcy you will likely need a good credit score and a down payment.  If you have been considering bankruptcy already your credit score is probably not very good.  If you are having trouble paying your bills and have a poor debt to income ratio then you will need to do something to improve your credit score before applying for a home loan.

Unless you are expecting an immediate and remarkable increase in your income then filing for bankruptcy is usually the best and fastest way to restore your credit, and thus qualify for a loan.  After filing, your debt to income ratio will usually immediately improve since you will no longer have the heavy financial burden that was hanging over you.  Your credit report will show the word “bankruptcy” but should not show the amounts or the details about your discharged debts.  In other words your debts are forgiven and washed away.

Your actual credit score will probably improve about 15 months after you file a bankruptcy case.  After the discharge making your monthly payments on a mortgage will be much easier and will also help improve your credit score.  You can now also immediately start saving for a down payment with money that would have otherwise been thrown towards high interest credit card minimums and the like.

At the end of the day you could fight your current high interest monthly payments and maybe start saving for a down payment, but with bankruptcy you can eliminate your debt entirely and start improving your credit score immediately.  Depending on the total debt amounts, our clients will almost always improve credit faster through bankruptcy than any other means.  If you have a mountain of debt then banks aren’t going to want to lend to you. The mountain isn’t usually going away in less than two years.   If you file for bankruptcy now, you eliminate your debt now, and you will start improving your credit now.

If you are swamped with debt but have always dreamed of home ownership, realize that bankruptcy will not preclude you from owning a home in New York City.  Your debt situation may not warrant filing for bankruptcy, but if your credit is destroyed and you are having trouble paying your monthly bills, then you should really get the pros and cons for your situation as soon as possible.  Waiting and hoping for your credit to improve is simply not as powerful as filing for bankruptcy.  If you live in New York City please arrange a free consultation with the Law Offices of William Waldner online or by calling 212.244.2882.  Our office is dedicated to helping people that are struggling with toxic credit card debt but want to find a way to purchase a home as soon as possible.    We are a boutique law firm that offers affordable debt relief assistance for all New Yorkers.

This article is intended for educational purposes only.  By reading this article no attorney-client relationship has been created.