Free Consultation
The office is open as per the NYS Covid-19 guidelines. We are now doing both in-person and telephone consultations. Please call the office at 718-855-6840 to schedule a time to speak with one of our experienced bankruptcy attorneys.

How Bankruptcy Can Lead the Way to Homeownership

Many people aspire to homeownership, but if they have filed bankruptcy they often believe it’s an unreachable goal. This isn’t true. In fact there are several ways bankruptcy can help someone become a homeowner.

(1)  Bankruptcy can improve credit scores and other creditworthiness metrics. It’s avoiding bills and creditors that causes problems. In this sense, filing bankruptcy is the mark of a responsible person accepting the consequences of his or her actions. A bankruptcy discharge eliminates the attributes that bring down credit scores.

(2)  Discharging debt can free up significant amounts of income and future interest payments for people to be able to save money again for the future. Those savings can be used to purchase a home.

(3)  For those whose incomes are too high to qualify for chapter 7, chapter 13 is also available. Chapter 13 bankruptcy allows debtors to enter into three-to-five-year loan repayment plans, after which their eligible debts are discharged. Here too, post-bankruptcy petitioners can save money out of their income that they would otherwise have spent on debt service payments.

(4)  Bankruptcy can help with other types of loans, such as auto loans. For instance, chapter 13 allows people to “cram down” the unpaid principal on a debt secured by a car. This can save money and allow you to keep your car.

(5)  Bankruptcy can be used with other government programs to reduce debts. For example, most federal student loans are eligible for various income-sensitive repayment plans. These plans can significantly reduce monthly payments, and after they are concluded, the remaining loan balances are canceled. Here, too, is another opportunity to save money for homeownership.

It might seem intuitive to believe that bankruptcy makes homeownership impossible, but really the opposite is true. Once someone is in financial trouble, the costs of filing bankruptcy are outweighed by those of trying to repay debts for the indefinite future. Consequently, bankruptcy makes large purchases like homes more affordable.

For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy law changes Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA

Recent Posts

Don’t Be Concerned With the Term ‘Debt Relief Agency’

If you are falling into financial difficulties, and you are about to discuss your situation with a New York bankruptcy lawyer, you might be told you are consulting with a “debt relief agency.” This phrase might be confusing, as it sounds a lot like “debt settlement,” which is entirely different from bankruptcy. What exactly is

Read More »

Obtain a Credit Report Before Filing Bankruptcy in New York

One thing good New York bankruptcy lawyers tell their clients to do is to obtain a credit report in preparation for filing bankruptcy. (In fact, it’s probably a good idea to get the report even before your first consultation with your bankruptcy lawyer.) This can easily be accomplished through Web sites like, which allow

Read More »

What Are Bankruptcy Risk Scores?

People considering filing bankruptcy in New York are well aware of the consequences of a bad credit score. They can be denied credit; potential employers might not hire them; and landlords might decline to rent to them. Consequently there’s plenty of advice about how to maintain and buoy a credit score. What isn’t out there,

Read More »

What Are the Components of a Credit Score?

One thing debtors are concerned about is their credit scores and the impact filing bankruptcy might have on them. Indeed, as the economy continues to struggle, the importance of credit scores has grown. Although they are not the be-all and end-all of one’s creditworthiness, banks, landlords, insurers, and even potential employers often use them to

Read More »

4 Ways Identity Theft Can Lead to Bankruptcy in New York

Few things are more aggravating than someone impersonating you to obtain credit. To make things worse, fraud on your accounts can force you into bankruptcy. Here are four types of information that if inadequately protected can lead you into bankruptcy. (1)  Social Security information. A common way people steal identities is through Social Security numbers.

Read More »

Stay Clear of Credit Rehabilitation Scams

Most of the time when New York bankruptcy lawyers discuss scams, they’re worried about con artists taking debtors’ money and forcing them into bankruptcy. The most common scam is debt settlement. A less common but sometimes more problematic scam occurs post-bankruptcy: the “credit rehabilitation scam.” The point is to deceive people into promising to repay

Read More »
Scroll to Top