Foreclosure After Bankruptcy

Mortgages and the high rate of foreclosure after bankruptcy are popular topics these days. Rising interest rates and the continuing escalation of foreclosures herald a flood of repercussions to personal and national fortunes. There is an underlying atmosphere of impending disaster which pervades the subject. It is as though a group of people are huddled breathlessly around a house of cards, fearful of exhaling lest the whole structure comes tumbling down.

It may be hard to believe the audacity of those who borrow more than they can possibly repay. Deep inside one may struggle with feelings of envy toward those who continue to indulge in reckless spending habits. Is it wise to budget and struggle while others seem to suffer few consequences for rash behavior? It is true that foreclosure after bankruptcy can lead to the loss of property and future credit availability. A bankruptcy can be listed as part of an individual's credit report for up to 10 years, and buying a home after bankruptcy may be difficult. The specific terms and conditions of bankruptcy may be different in each state. Consult a lawyer for the particular details that will apply to each situation before deciding upon a course of action. However, there are things that one may do to repair a broken credit history.

Before the 1930's, obtaining a loan for the purpose of home ownership was primarily reserved for the wealthy. Home loans were granted for much shorter terms -- perhaps 2 or 3 years -- rather than the 25-30 year mortgages available at this time. The familiar practice of buying a home by putting payment on a small percentage of the new home's actual value contrasts sharply with former requirements regarding down payments, which could be as much as 50 percent. More people are able to purchase their own home, yet the willingness of some institutions to grant large sums of money to those who may not be capable of repayment is irresponsible and short-sighted. Far from freedom of consequence, this can lead to future misery for both the lending corporations and the people who are their clients. Preventing foreclosure after bankruptcy would seem to be in the best interest of both parties. First in priority is informing the lender when difficulties arise in meeting mortgage obligations. Done promptly, this allows time for solutions to be worked out, such as temporarily skipping payments or renegotiating the contract. Mortgage companies would probably rather receive less interest income than deal with foreclosure proceedings. Homeowners would certainly endorse a solution which allowed them to live in their present home rather than deal with buying a home after bankruptcy.

Although the majority of people have little say in the setting of rules for lending institutions, aside from the encouragement of legislation aimed at more responsible lending practices, this does not mean one is necessarily left to flounder in a sea of debt and worry over financial matters. Control can be exercised over personal financial decisions. A credit report is available free every year from the three main credit agencies. Correct any errors by writing to the agencies to request that the report be changed. A secured credit card may be obtained. These require an amount of money to be deposited with the credit card company, which allows a person to slowly rebuild credit by using the card in a responsible manner. Do not fall victim to the various debt consolidation schemes. While facing concerns about the possibility of foreclosure after bankruptcy, or wondering if it is possible to even consider buying a home after bankruptcy, there are several biblical principles to keep in mind regarding the use of money and the repayment of loans or other obligations. Without guidelines, a Christian is no less susceptible to foreclosure after bankruptcy or to making unwise decisions regarding financial matters than any other person. On the other hand, being willing to abide by these principles can lead to a sense of security and purpose about handling personal finances.

All that an individual has comes from God. Seek out and obey the principles He has set out in the Bible, and there will be a positive result: "Whosoever cometh to me, and heareth my sayings, and doeth them, I will shew you to whom he is like: He is like a man which built an house, and digged deep, and laid the foundation on a rock: and when the flood arose, the stream beat vehemently upon that house, and could not shake it: for it was founded upon a rock." (Luke 6:47-48)

Of course, debt should be avoided in the first place. Take time to review your financial situation. Think about each need and build in time to reconsider purchases in order to prevent impulse buying. Pay debts. Do this before allowing too many 'extras'. This does not have to mean living in misery until all debt is paid off. Think about creative alternatives to obtain the things that are needed. Finally, do not neglect to give towards other's needs. Giving to others develops a right mindset about money and priorities.

There is hope even for those who have made mistakes in the past yet desire to pursue buying a home after bankruptcy. This is a good time to sit down and take stock of present debt and finances. Make up a plan to eliminate debt. Writing conclusions down can make things look far more manageable than just continuing to mull over vague yet insistent fears that financial matters have spun out of control. Reject the temptation to just 'wipe the slate clean' with a consolidated loan. Usually, this will only leave the consumer in more debt in the end. Instead, if counseling is needed, consider one of the free credit counseling programs which are available. Build in some rewards to the plan when certain goals are reached. After all, everyone needs a little encouragement sometimes to keep going! Finally, sleep securely at night, living in a house(life) built upon a rock.

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