Chapter 13 filers in Virginia should know that getting a home during or after bankruptcy is not impossible. While it can be challenging, renting or purchasing a home can be a reality for many filers.
Chapter 13 is occasionally referred to as a wage earner’s plan as it allows people with a reliable source of income enough time to pay off their debts with manageable payments. It also accounts for one third of the bankruptcies filed in the United States. People who have unsecured debts that are less than $394,725 and secured debts that are less than $1,184,200 are eligible to file under this chapter.
The difficulty with renting a home may be mitigated by submitting a letter to a potential landlord and explaining the situation and the circumstances that led to the bankruptcy. Letters of recommendations from bosses, a current landlord and pillars of the community may also be useful to demonstrate one’s worthiness of being a renter.
Purchasing a home is also possible for Chapter 13 filers, even though it may be more challenging than trying to rent a home. Pursuing a mortgage through the Federal Housing Administration is ideal for bankruptcy filers as lenders are able to approve mortgages insured by the FHA to filers if certain qualifications have been verified.
Chapter 13 filers have to prove that they have been making bankruptcy payments for at least one year and that their payments have been on time. Filers are also required to verify that the bankruptcy court has given permission for the filer to take part in the mortgage transaction. An attorney can provide more information in this regard.