How Bankruptcy Helped Our First-Time Home Buyers

Nov 9, 2015 | Bankruptcy, Chapter 7 Bankruptcy

Some people don’t give their credit a minute’s thought until they need a good score, and by then, it’s too late to do anything about – at least right away.

This is the story of two of our clients who were just like that. They were a young, married couple who never thought about their credit until they decided to buy a house.

There’s No Place Like Home

Our clients had never even considered a home until a new housing development opened across the street from their apartment. At first it was just a lot of noisy trucks and bulldozers. But eventually this noise transformed itself into four, beautiful new model homes.

They didn’t go to buy, just to look. They had no plans one Saturday afternoon so they simply walked across the street and checked things out. As soon as they stepped foot in the first model home, they were in love. Within an hour, they were already sitting down with a sales associate, discussing that very first model which they hoped would soon be theirs.

They picked the lot where their new house would sit and discussed all the options. She wanted the upgraded kitchen cabinets and he wanted extra outlets in his future man cave. They discussed where the tile floors should go and whether or not to convert the den into a fourth bedroom. All that was left was to visit the financing office and to pick out colors and textures.

Shattered Dreams

When our clients sat down with the finance department, it was not a pretty site. The financing agent pulled their credit, and quickly discovered they had almost $40,000 in credit card debt between the two of them. Much of it was already in collections. She informed them that their dream home was not to be. They would have to clean up their credit in order to qualify for a home. They left the office heart-broken.

The husband discussed their predicament with a friend at work. The friend told him how he had filed with our office a few years ago and now was a homeowner. He had no trouble qualifying for a home.

Shortly after this discussion, the couple came to our office. They soon filed for bankruptcy, completely eliminating all of their credit card debt and collections. We then guided them through the process of improving their credit. After two years, their score was good enough to qualify for a mortgage.

Home Sweet Home

Just by coincidence, the model home which they had first fallen in love with was put up for sale by the owners who were moving to another state. Their bid was accepted, and they are still living in their dream home today.

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