Frank Williams, Broker Associate, ABR
Phone
(312) 933-8072
E-Mail Us
Sudler Sotheby's International Realty
47 West Polk Street
Chicago, IL 60605


 
 
Chicago Illinois Homes For Sale, Chicago IL Real Estate
Questions & Answers
Get the answers on home selling and buying.
  Bankruptcies & Foreclosures - Q & A
Q:  How do you clear up bad credit?
A:  There is no fast and easy way to repair damaged credit that took months or years to occur. The law allows negative information to appear on an individual's credit record from 7 to 10 years.

The first step is to check your existing credit record. Anyone can obtain copies of their own credit report free of charge if they have been turned down for credit recently. For a fee, people can request copies of their own credit report from the three major credit reporting agencies: Experian at (800) 392-1122, Equifax at (800) 685-1111 and Trans Union at (312) 408-1050. The bureau also should provide instructions on how to read the report and how to dispute any inaccuracies it contains.

If the credit report is correct, take care of any outstanding delinquent obligations first.

Resources: * "Rebuild Your Credit: Law Form Kit," Nolo Press, Berkeley, Calif.; 1993.


Q:  What options are there after Chapter 11?
A:  A previous bankruptcy can remain in a credit file for seven to 10 years.

Depending on when the bankruptcy was discharged and what kind of credit a borrower has reestablished since then, it needn't be an obstacle to obtaining loan approval. The longer ago the discharge occurred, the better off a loan applicant will be.

Many lenders also will take into account the circumstances surrounding a bankruptcy. For example, they may look more favorably upon you as a borrower if your bankruptcy was due to financial reverses you suffered due to your employer's own financial difficulties. On the other hand, if you declared bankruptcy because you overextended your personal credit lines and lived beyond your means, a lender probably won't be as forgiving.

If you are in the latter category, you may want to contact a mortgage broker who may qualify them for a "b" or "c ," loan, which usually comes at a higher interest rate.

Resources:
* "Rebuild Your Credit: Law Form Kit," Nolo Press, Berkeley, Calif.; 1993.


Q:  Can I refinance after bankruptcy?
A:  Refinancing may be prudent but could be difficult after a bankruptcy. If you're considering bankruptcy, you may want to go to your current lender first and explain the situation. If you have been current on your payments, the lender may be accommodating and refinance your loan, easing your financial situation.

Q:  How long do bankruptcies and foreclosures stay on a credit report?
A:  Bankruptcies and foreclosures can remain on a credit report for seven to 10 years.

Some lenders will consider an borrower earlier if they have reestablished good credit. The circumstances surrounding the bankruptcy can also influence a lender's decision. For example, if you went through a bankruptcy because your employer had financial difficulties, a lender may be more sympathetic. If, however, you went through bankruptcy because you overextended personal credit lines and lived beyond your means, the lender probably will be less inclined to be flexible.


Q:  What can I do if I have bad credit?
A:  While some people have rebounded from a foreclosure to buy another home within several years, credit problems stemming from a foreclosure can continue much longer for others.

Real estate experts say you should be candid with your lender in discussing these issues. If your bankruptcy resulted from losing your job due to your employer's financial difficulties, a lender probably will look upon your situation more favorably than if your bankruptcy was caused by overextended credit cards.

Resources:
*"Rebuild Your Credit: Law Form Kit," Nolo Press, Berkeley, Calif.; 1993.


Q:  How bad is a previous foreclosure on credit?
A:  A property foreclosure is one of the most damaging events in a borrower's credit history. In terms of the effect on credit history, a deed in lieu of foreclosure or a short sale is not as adverse an event as is a forced foreclosure.


Copyright 1999 Inman News Features


Preferred Partners
Check out the best in local home-related services.
Automated E-mail Listings Service
Sign up to automatically receive new listings today!
Home Advice
Get the answers on home selling and buying.
Real Estate News
Find out what's happening in real estate.
 
  Articles
   West Loop Real Estate
Hyde Park - Kenwood Homes For Sale
About Bronzeville
Refinancing
Leveraging Your Money
Length of Your Mortgage
Real Estate Buyer's Agent Council
Bolingbrook Homes
Saving for the Down Payment
Closing Costs
   How Mortgage Loans Work
Adjustable-Rate Mortgages
How Much Can You Afford?
Getting Your Finances in Order
Your Credit History
Mortgage Glossary
Free CMA Request
Resources - Homes in Other Areas
Relocation Resources

main page
search for homes
our listings
Home Evaluation/CMA
Chicago ZIP CODES
mortgage center
Chicago Home Loans
contact me
free reports
Daily Interest Rates
Frank Williams, Broker Associate, ABR
Phone
(312) 933-8072
Sudler Sotheby's International Realty
47 West Polk Street
Chicago, IL 60605
 

Homes.com Copyright ©2000-2006 Homes.com, Inc. All Rights Reserved. Privacy Policy. Full Terms and Conditions.
HOMES.COM is one of the largest Internet real estate sites with hundreds of thousands of homes for sale and apartment rentals with photos, descriptions, and relocation services. The advertisers and publishers are not responsible or liable for misinformation, misprints, or other errors. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental.

Equal Housing Opportunity

Member Login