Get an FHA or Conventional Loan After 24 Months

Remember -- the 24 months start from the date of discharge, not the date of filing.  You can then apply for a traditional or FHA mortgage.  

But, it is not automatic.  You are going to have to build up over the 24 months your credit by doing the following:

• Paying your bills on times
• Looking to get credit from mainstream creditors
• Have consistent income
• Avoid any additional levies
• Present a smart budget

You should start talking to a mortgage professional about 12 months after the date of discharge.  Remember -- if you don't have your discharge letter, contact your Chester County bankruptcy lawyer.  You want to be honest and upfront with the mortgage professional.   You want to put yourself in the best position by having opened and current lines of credit (i.e. credit cards).  

Put Yourself in the 

Get your credit report run.  If you have a car payment, keep it up to date.  No late payments!  Keep your debt to a minimum.  Find out what your debt-to-income ratio is.  

If possible, you will want to have as much money possible for the down payment.    FHA requires the lowest down payment is normally the best option for Chester County families.  You will need to convince the professional and the banks to pick you not because you are a nice person, but because you present a low risk of default.  Bankruptcy gave you the fresh start -- you must get yourself to the homebuying finish line by using credit appropriately.  

Property Value Increases in a Chester Bankruptcy

You can have a bankruptcy filed and then, while in bankruptcy, the estate appreciates in value.  So, who "owns" the appreciation?  

First, a Chester County bankruptcy lawyer should determine if the asset is exempt -- if through 522(d) then the appreciation is the debtor's property.  If, however, the debtor can only exempt his interest in the property, then any appreciation beyond the exemption goes to the bankruptcy estate.  

Even when the debtor's initial interest is listed on the petition properly, the change can still hurt the Chester County debtor down the road.  This can allow the trustee to seek to liquidate the asset to get the non-exempt amount.  

Reality of Appreciation

Now, this rarely happens.  A hypothetical would be if you had a penny stock and the stock went through the roof during the bankruptcy.  For example, if you had a thousand shares at $1 and the shares all of a sudden went up to $100.  Now, you have $100,000.  The trustee could seek to sell the stock and repay the creditors accordingly.  

In the end, the law makes sense but rarely does this happen.  If anything, property depreciates under a bankruptcy.  

Schedule B on a Bankruptcy Petition in Chester County

Schedule B should reflect your personal property at the time the case is filed.  It is not during the time of the "interview" with the Chester Count bankruptcy lawyer, but at the time of filing.  All interests of the Chester County debtor should be listed on Schedule B except interests involving executory contracts (i.e. leases, timeshares) or unexpired leases -- these are listed on Shedule G.  

You should know that an intentional non-nondisclosure on your schedule B is grounds for the denial or revocation of a Chapter 7 discharge and is a federal criminal offense (because it is concealment of assets) punishable by up to 5 years in prison and a $500 fine.  This gets prosecuted by the U.S. Attorney General and the FBI.  

You attorney should go through with you the general property that is typically put on Schedule B.  But, you should be mindful of any unique personal property that you may own (i.e. collections, firearms, etc.).  If additional space is needed on Schedule B, a separate sheet is used.  The sheet should contain the case name, case number, and the schedule and category number attached to the last page of Schedule B.

What to List on Schedule B  

Schedule B should include all nonexempt cash, bank deposits, household or sporting goods, prepaid rent, accrued earnings, or tax refunds at the time of filing.  In the far right hand side of the page on Schedule B, you will report the estimated current replacement value of the property as of the date of filing.  This is the replacement value -- not what you paid for the item.  It does not matter if the property was given to you as a present -- you must report the replacement value.  

If you have life insurance, you must report the cash surrender value of the property or contract.  This is normally obtained by contacting your insurance provider and getting the "cash surrender value".  

In a big day for any Chester County bankruptcy lawyer, the IRS is now letting you download your transcript.  For those who don't know, the Trustee requires that you provide 2 years of your IRS tax returns.  And, if you are in a Chapter 13, the PA Department of Revenue will be looking back as far as five years.  

This, surprisingly, is a big step in the right direction.  No longer will you and your attorney have to wait for the USPS to deliver a hard copy. And, no longer will you have to wait for your accountant or the local H&R Block.