The idea of bankruptcy protection is precisely to help you get back on your feet and start fresh without the burden of crushing debt. That also means to fulfill your dream of your home.

After your debts have been discharged following your bankruptcy filing, the bankruptcy does not legally prohibit you from buying a home. The barriers to home ownership can be a consequence of your credit rating rather than the mere fact that you have filed for bankruptcy. But even these barriers are surmountable. A typical time frame ranges from 18 to 24 months, but it really depends on your situation. A former creditor or bankruptcy trustee representing your former creditors cannot claim your property after you have successfully bankruptcy filing and discharge.

Build Credit

A bankruptcy filing can stay in your credit report for up to 10 years. But just two years post bankruptcy, your credit score is no longer adversely affected by the bankruptcy filing. Therefore it is really important to build that credit. Be responsible and pay your bills on time. Do not overspend and keep your available credit small so you will not be tempted to overuse credit. You will need good credit to get favorable interest rates for any type of loan, but especially a mortgage. Lenders will look at your spending behavior to determine your creditworthiness and their risk. The lower your credit score, the higher your interest rate will be.

What can you afford?

Make a realistic assessment of what you will be able to comfortably afford. Consider all costs associated with owning a home, not just the mortgage. Condo fees, maintenance costs and property taxes are just a few of those monthly costs which need to be considered in the overall calculation. Also consider what would happen if you or a spouse became unemployed. Choosing a home that is below your means may help you avoid foreclosure or another bankruptcy in the future in case you have unexpected financial problems.

Save for a down payment

A large down payment will yield more favorable interest rates, so it definitely pays to wait until your down payment amount is substantial. Lenders are not only interested in your down payment, but also in the stability of your income and a payment history that assures them you will and afford to make your monthly mortgage payments.

Be aware of suspicious lenders

The mortgage lending industry is very competitive. Do not blindly trust lenders who target people with less than perfect credit. Do your homework and read the fine print. Understand all the hidden costs such as loan fees, escrows for taxes, insurance costs and particularly closing costs which can be expensive. Shop around and compare prices and costs.