can i buy a home

Can I buy a home after filing for bankruptcy?

Can I buy a home?  A Quora user asks: If I file for bankruptcy, can I still buy a home?

 

Victor Fong, Licensed Insolvency Trustee in Toronto, Canada replies:

The following comments are based on Canadian bankruptcy law. I’m also assuming that you’d be an undischarged bankrupt when you purchase the home.

Yes, in theory you can purchase a home so long as someone is willing to give you a mortgage to finance the purchase and is aware of your bankruptcy. It is an offence to obtain credit over $1,000 without disclosing to a lender that you are an undischarged bankrupt.

Aside from this, a question your trustee will ask is this: if you’re filing bankruptcy, how are you getting the money for the down payment? If someone is gifting you the money, then that gift is subject to seizure by your trustee while you’re undischarged.

With the above in mind, the best thing to do would be to wait until you’re discharge before purchasing a home.

Once you’ve been discharged, can start rebuilding your credit by obtaining a secured credit card. A secured credit card is relatively easy to acquire once you’ve obtained your discharge from bankruptcy. You will need to start using it and paying off the monthly balance consistently.

You’ll also need to start putting some money away for a down payment towards your dream home. In Canada, the minimum down payment is 5% of the purchase price if the price is $500,000 or less. If the purchase price is between $500,000 and $999,999, the down payment is 5% of the first $500,000 and 10% of any amount over $500,000.