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South Carolina debt relief: Mortgages not out of the question

South Carolina residents may be fearful of seeking debt relief due to the impact it will have on their credit reports and their chances of getting a mortgage. While a bankruptcy will stay on someone's report for up to 10 years, obtaining a mortgage is not as difficult as many people may think. In fact, some consumers who have sought debt relief in the form of bankruptcy may be eligible to obtain a mortgage in as little as a year after filing.

Federal Housing Administration mortgages require a waiting period of only one year for consumers who have filed Chapter 13. An extra year is applied to those who have filed for Chapter 7, for a total of two years before a mortgage can be obtained. This is due to lenders viewing Chapter 13 as a slightly more responsible bankruptcy avenue to take because it reorganizes a consumer's debts instead of simply discharging them. For conventional mortgages, consumers may have to wait up to four years to apply.

Some lenders may shorten the time requirements if the bankruptcy was filed because of a hardship such as divorce, illness or death. Lenders will often require a letter detailing the circumstances and documentation such as hospital bills or a divorce decree approved by the courts. However, consumers should know that this is a rare occurrence and may want to go through normal avenues unless they have a severe and well-documented hardship.

Seeking debt relief in South Carolina shouldn't be an overwhelming prospect. People who are fearful due to the credit impact, or who worry about obtaining a mortgage should know that although there will be credit repercussions, getting a mortgage is not out of the question. Taking credit responsibility seriously and working diligently to establish a clean credit record as well as paying all bills on time will likely be looked upon favorably by lenders when approving a mortgage application.

Source: The New York Times, "Life After Bankruptcy," Vickie Elmer, Sept. 13, 2012

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Columbia, SC 29210
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Reed Law Firm, P.A.
220 Stoneridge Drive,
Suite 301

Columbia, SC 29210

Phone: 803-726-4888
Fax: 803-726-4887
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Reed Law Firm, P.A.
1807 West Evans Street,
Suite B

Florence, SC 29501

Phone: 843-679-0077
Fax: 843-679-0667
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