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Do I Become Ineligible for a Home Loan After Filing for Bankruptcy?

Filing for bankruptcy could affect your life in both positive and negative ways. The main negative in declaring bankruptcy is that the debtor’s credit score will take a major hit. While it’s very much possible to restore a bad credit score, many consumers do wonder what it means for immediate financial assistance requirements. For example, if you don’t own a home and have filed for bankruptcy, does that mean you are ineligible for a mortgage now and for how long?

The question is not easy to answer. Personal circumstances and specific situations can matter. It’s best to first get advice from a qualified bankruptcy lawyer in Scottsdale. However, consumers can also get a general idea of obtaining a home loan following bankruptcy by reading this article.

Qualifying for a Home Loan Following Bankruptcy

There are no legal barriers to qualifying for a home loan following a bankruptcy declaration. A lender cannot deny you a mortgage based solely on the fact that you have filed for bankruptcy once. Lenders will use other underwriting factors to determine your eligibility.

A consumer’s ability to get a home loan following bankruptcy is determined largely by the credit score, monthly income, down payment levels and the remaining savings. Keep in mind that mortgage lenders require a down payment on the loan. If you have no trouble paying for the down payment, then you can quite often also qualify for the loan. If not, you should at least be able to pay 20 percent of the down payment right away. The higher the down-payment one can offer a lender, the higher the chance that your mortgage loan will close and fund on the date of purchase.

How Bankruptcy Affects Credit Scores and Eligibility for Home Loans

You should expect your credit to plummet by at least 120 points if you file for bankruptcy. All of the credit monitoring companies scan the bankruptcy dockets every day to watch consumers.  After you are discharged from your bankruptcy case, you will need to soon start rebuilding credit to prevent going into the negatives. If you start repaying remaining debts that survived your bankruptcy, your credit score will rise without a problem. Rehabilitating credit in this manner is the best option you have for being qualified for a subsequent home loan. Even if your credit score is low, if you can show the lenders that it has been improving, then your mortgage application may receive more favorable treatment during the loan application process.

How to Improve Your Chances of Obtaining a Home Loan Following Bankruptcy

First of all, you should take steps to get your credit score back up. If you filed for Chapter 13 bankruptcy, sticking to the monthly court-approved payment plan should do it. Otherwise, you can get a credit card and make timely payments without missing a single payment due.  Pay on time, each and every month.

Start saving. You should certainly expect to spend some time-saving money before you can apply for a mortgage. Let your savings accumulate so you have enough to at least partially cover a down payment. The more savings you have, the better your application will look.   You can get friends or family to help you accumulate down payment funds as well, so long as they are willing to sign off and release those funds to you in writing.

Don’t forget to repay existing loans such as student loans, taxes owned, or child support. Always continue to timely pay your regular bills on time as well.

What matters is that you maintain a good financial profile by not falling back into the previous circumstances that caused you to file for bankruptcy.  Time is your friend.  After a bankruptcy, the longer you have come through and demonstrated a strong credit history and ability to pay—the mortgage lenders will start to consider you again for home mortgage loan qualifications.

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Bankruptcy Exemptions Allowed Under Arizona Law

Arizona bankruptcy law allows for a set of exemptions for assets when filing for personal bankruptcy under any chapter. Exemptions are property the debtor, that is you, can keep when you file for bankruptcy and are later discharged therefrom.

You can only exempt assets specified under the law. There are some debts that are non-dischargeable, or cannot be erased by a judge. Examples of non-dischargeable debt include income taxes owed, student loans, and child support and domestic support obligations. There are much more.

Exemptions apply to single persons or married couples filing for bankruptcy. Married couples who file jointly can claim typically claim all exemptions unless a judge specifies otherwise. Here is a list of notable exemptions under Arizona law:

  • Homestead—Real Property, like a home, where the debtor lives that is worth up to $150,000. Exemptions for sale last 18 months after or until a new property is purchased. A married couple cannot double the exemption up to $300,000 however.
  • Personal property like furniture, vehicles worth less than $6,000, family portraits, electronic gadgets, rugs, bank deposits up to $150, books, and so on that are worth up to $4,000. A married couple can double personal property exemptions.
  • Insurance proceedings such as group life insurance policies, fraternal benefit society proceeds, disability benefits, health insurance claims, and life insurance cash value up of total $25,000 (up to $1,000 per person, or $2,000 per dependent). A married couple can double life insurance value exemptions.
  • Earnings of a minor child.
  • Business or partnership property.
  • Various types of pensions, such as ERISA, 401ks, the board of regents members, IRAs, government worker pensions such as those for firefighters and state employees.
  • Public benefits received such as unemployment benefits, worker’s compensation, and welfare.
  • Value of tools of the trade such as arms, farm machinery, uniforms, teaching aids, and seeds, animal feeds, and so on.
  • Unearned wages for about 75 percent, payment pensions, and other forms of wage income.

The above is just a summary of exemptions. You can ask your bankruptcy attorney in Scottsdale for detailed clarifications. Some exemptions have value limits that you need to get clarified. Married couples can double on some exemptions, but not others.

Exemption limits also apply to equity debtors may have on their real property. Equity is defined as the difference between what the debtor owes on the real property and the actual value of the real property. For example, if you took out a $200,000 mortgage on a house worth $300,000 you would have $100,000 equity in the home.

Some equity is covered by exemptions, so the debtor can repay a previous loan. If the exemption doesn’t cover all of the property, then the appointed trustee can liquidate the asset and distribute the profits. However, remember that not all properties are exempt. You can still keep property without exemption by paying the trustee value of the property.

In addition to the above, there could be federal exemptions for which you are eligible. The federal exemptions are in addition to your Arizona exemptions. In the end, you should contact a lawyer to check out your eligibility for federal exemptions.

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How to Obtain a Divorce When Your Spouse Won’t Agree

The Scottsdale divorce lawyers at Canterbury Law Group have represented hundreds of clients in Scottsdale divorce cases. Although every case is unique, often we see one spouse refusing divorce. No one can stop you from getting a divorce if you want one, with the possible exception of the court. If you don’t follow proper legal procedure, a judge can deny your divorce, forcing you to start over. However, your spouse can’t stop you, but she or he can complicate the process.

Here are steps in getting a divorce, even when your spouse will not agree:

  • 1. Any reason is sufficient to file for divorce. Contrary to popular belief, neither spouse needs an reason or grounds for seeking to terminate the marriage. As a “no fault” state, Arizona courts and judges are actually prohibited from inquiring into the romantic issues of either spouse during the trial or otherwise. Put another way, it does not matter how you got here, you have a legal right to divorce if and when you are ready.
  • 2. Research the rules for service of process in your state. Make sure you understand exactly what you have to do to ensure that your spouse legally receives a copy of your divorce petition after you file it. If you err, your spouse can say they were not properly served and block your divorce proceedings. You could still get a divorce, but you’d have to start the process all over again. Do it right the first time and have them served by a licensed process server.
  • 3. Wait out the period of time your spouse has to answer your divorce petition. If he/she files a response with the court, you’ll probably have to resolve your divorce by trial or mutual consent; some spouses won’t agree to a settlement if they don’t want the divorce in which case you are forced to trial and the judge makes all final decisions of equitable distribution.
  • 4. Prepare for a Default Judgment Hearing if your spouse does answer your divorce petition. Even assuming your spouse “no-shows” on the case, after a certain number of days have elapsed, and assuming you properly served your opponents, you can petition the Court in writing to procure a Default Judgment of Divorce wherein all items requested in your original petition and can and typically is granted by the Court assuming no defense or response is ever tendered by your opponent. In the end you’ll be divorced and he or she will have never set foot in a court of law.

The Scottsdale divorce attorneys at Canterbury Law Group have represented women and men, young and old, in their complicated divorce cases. To discuss your options in a Scottsdale divorce, call today to schedule a consultation. 480-744-7711

Divorce & Legal Separation, Divorce Attorney, Divorce attorneys Scottsdale, Divorced Parents, Family Law, Family Law Attorney, Same Sex Divorce, Same Sex Divorce in Arizona, Scottsdale Attorneys, Scottsdale Divorce, Scottsdale family attorneys, Scottsdale Legal Help, Uncategorized
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Mortgage Financing After a Life Changing Event

Bankruptcy, foreclosure and other life events are bumps on the road to sustainable homeownership. With the recent events of the housing bubble and subsequent crash, many people may want a second chance to be homeowners. These “Boomerang Buyers” (a term often used to describe people who had to rent post-2008 but are returning to the homebuying market now that the economy has improved) may not know all the specifics of required waiting periods after their foreclosure, short sale or bankruptcy.The below chart covers the typical waiting periods associated with these types of events. Of course, as an experienced Loan Officer and Sales Manager at Academy Mortgage, I have seen exceptions occur. Working with the best mortgage team can help you get back into a home faster than you may have thought was possible.

Give me a call today so we can cover the specifics of your life event and set a plan to make you a homeowner again.

MichaelHeader

Conventional
Foreclosure 7 years from date completed to the disbursement date of the new loan
Deed-in-Lieu of ForeclosurePre-Foreclosure or Short Sale 4 years from either the date of sale or from the completion date to the disbursement date of the new loan
Prior Loan Modification 2 years eligible with Fannie Mae DU approval
Chapter 13 Bankruptcy 2 years from discharge date
4 years from dismissal date
Chapter 7 Bankruptcy 4 years from discharge or dismissal date
Multiple Bankruptcy Filings in the Last 7 Years 5 years from last discharge or dismissal date
Jumbo Loan Follow requirements specific to the proposed loan product

 

VA
Foreclosure
Deed-in-Lieu of Foreclosure 		 2 years from date completed and title transferred back to lender
Pre-Foreclosure or Short Sale 2 years from credit approval date to date sale closed and title transferred to new owner
Prior Loan Modification Must have a 12-month satisfactory credit history after the event
Chapter 13 Bankruptcy 1-year payout has elapsed with all payments made on time and permission obtained from court for new mortgage
No wait time if discharged or dismissed
Chapter 7 Bankruptcy 2 years from discharge or dismissal date
Consumer Credit Counseling 1-year payout has elapsed, payments made on time, and agency permission for a new mortgage

 

FHA
ForeclosureDeed-in-Lieu of Foreclosure 3 years from date completed and title transferred back to lender
Pre-Foreclosure or Short Sale 3 years from the date of title transfer to FHA case number assignment
Prior Loan Modification No wait period, but past 12 months’ credit history must have no late payments
Chapter 13 Bankruptcy 1-year payout has elapsed with all payments made on time and permission obtained from court for new mortgage
No wait time if discharged or dismissed
Chapter 7 Bankruptcy 2 years from discharge or dismissal date
Consumer Credit Counseling 1-year payout has elapsed, payments made on time, and agency permission for a new mortgage

 

USDA
ForeclosureDeed-in-Lieu of Foreclosure 3 years from date completed and title transferred back to lender
Pre-Foreclosure or Short Sale 3 years from credit approval date to date sale closed and title transferred to new owner
Less than 3 years may be eligible if all mortgage and installment debt paid on time within the 12 months prior to the sale
Prior Loan Modification 3 years from modification completion date
Chapter 13 Bankruptcy 1-year payout has elapsed with all payments made on time and permission obtained from court for new mortgage
No wait time if discharged or dismissed
Chapter 7 Bankruptcy 3 years from discharge or dismissal date
Consumer Credit Counseling 1-year payout has elapsed, payments made on time, and agency permission for a new mortgage

 

Please Note: Shorter wait periods may be available under certain circumstances and depend on the reason for the derogatory credit event. Please refer to your Loan Officer for details.

 

All Loan Types: If a mortgage loan has gone through a previous modification, or the lender offered a short payoff, it is NOT eligible for a refinance.

All mortgage products are subject to credit and property approval. Rates, program terms, and conditions are subject to change without notice. Not all products are available in all states or for all amounts. Additional conditions, qualifications, and restrictions may apply. This is not an offer for extension of credit or a commitment to lend. MAC01215-1021324909

 

Sincerely,

Michael
Michael Burkes
Sales Manager Producing | NMLS #1427401
15333 N Pima RD 205
Scottsdale, AZ 85260
(602) 908-9484 – Cell Phone
(480) 696-3026 – Office
[email protected]
www.AcademyMortgage.com/michaelburkes
LO State Lic: 0933965
Corp NMLS: 3113 |
Academy Mortgage – 15333 N Pima RD 205, Scottsdale, AZ 85260

For state licensing information, please visit:

http://www.academymortgage.com/StateLicense

EHO

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3 Options in Business Bankruptcy

The Scottsdale bankruptcy attorneys at Canterbury Law Group work in business bankruptcy, which allows a company to efficiently sell assets or to liquidate in a controlled manner. Just like any other business strategy, bankruptcy should be considered early enough to be a viable strategy to preserve the business’s assets and help it continue as a going concern. Bankruptcy can also be an important tool for assisting in an orderly wind down and liquidation of a business and its assets. In addition to the some of the strategic benefits, liquidating through bankruptcy can provide numerous benefits over merely dissolving your entity.

There are three types of bankruptcy that your business may file for depending on its business form. Sole proprietorships are legal extensions of the owner; therefor the owner is responsible for all assets and liabilities of the firm. A sole proprietorship can take bankruptcy by filing for Chapter 7, Chapter 11 or Chapter 13. Corporations and partnerships are legal entities separate from their owners. As such, they can file for bankruptcy protection under Chapter 7 or Chapter 11.

1. Chapter 7 – The most common form of bankruptcy in the United States, Chapter 7 bankruptcy, provides individuals with a discharge of all debt which are “dischargeable” under the Bankruptcy Code. In a Chapter 7, all of the debtor’s non-exempt assets on the petition date are liquidated through the priorities set forth in the Bankruptcy Code. At the time of filing, the bankruptcy code establishes the creation of your “debtor’s estate” which includes all “non-exempt assets.” As a Debtor you have various duties and obligations, including significant duties of co-operation, which are owed to the Trustee. These obligations are designed to assist the Trustee in the administration of your bankruptcy estate.

2. Chapter 11 – More individuals, usually with a high net worth, are turning to Chapter 11 to solve their bankruptcy needs. The bankruptcy attorneys at Canterbury Law Group have significant experience with Chapter 11 filings, which tend to be more complex, and are capable of filing an individual case under Chapter 11 as mandated by the facts of each individual case.

3. Chapter 13 – This type of bankruptcy is not a per se liquidation but rather involves a restructuring of debt typically over a three or five-year period, pursuant to a plan which is filed with, and approved by, the Court. This plan allows a debtor to pay its creditors a percentage of the amounts owed to them. Like in a Chapter 7, in a case under Chapter 13, the court appoints a Trustee. Pursuant to the terms of your Chapter 13 plan, you make one single global monthly payment to the Trustee, who then pays the creditors their pro-rata share of what is owed.

Canterbury Law Group is uniquely qualified to represent clients in the sophisticated business bankruptcy cases. The range of services we provide depends on an individual’s or a company’s unique situation. Call us today to schedule a consultation. 480-744-7711. www.canterburylawgroup.com

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Understanding Divorce and Custody Terms in Arizona

A component of any Arizona divorce when children are involved is a court enforceable parenting plan. When parents cannot mutually agree on a child plan, the court will often establish a plan that the parents must follow for the children’s health and welfare. In some situations, unmarried parents, relatives or other court approved persons can obtain custody or parenting time. Regardless of the facts presented, Arizona law requires that the best interest of the child be the lead consideration above any other.

The family law attorneys at Canterbury Law provide legal strategies throughout the Phoenix area to protect what matters most in divorce – the long-term welfare of the children. Here are common custody terms that one can expect to hear when children are involved in divorce.

Sole Custody – This term is used when one person has sole legal custody of a child. In this situation, the court orders that one parent be responsible for making the major decisions regarding the child’s care or welfare. Although both parents may discuss these matters, the parent designated by the court has authority to make final decisions in the event the parents do not agree.

Joint Custody – Often referred to as joint legal custody or joint physical custody, this type of custody requires that both parents submit a parenting plan to the judge. Canterbury Law in Phoenix can guide you on all the steps in your divorce and custody needs.

Legal Custody – Legal custody is the status where one or both parents are responsible for making the major decisions regarding the child’s care or welfare. When legal custody is awarded to one parent, it is called “sole legal custody.”

What is “Joint Legal Custody”? – When the court grants joint legal custody, each of the parents has the same rights to make decisions about the child’s care and welfare and neither parent’s rights are superior to those of the other parent.

Joint Physical Custody – When the court grants joint physical custody, the place where the child lives (the child’s physical residence) is shared between the parents in a way that the child will have essentially equal time and contact with both parents. Joint physical custody may be granted in situations where parents share joint legal custody or when one parent is granted sole custody.

Let our dedicated family law team help with protecting the security of your children. Contact us today for a consultation.

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