As a Financial Counselor I am asked daily by clients to give my advice on getting a mortgage or credit in the future, whilst they are currently reviewing going bankrupt.

A conversation might go like this:

Client:  I am considering going bankrupt and need help.

Advisor: OK, tell me more about your circumstance?

Client: I owe 37K in unsecured debts, am 3 months behind on my mortgage and 3 months on the second charge on the property.  If I file for bankruptcy, can I get another mortgage??

I can understand this person’s concern.  It is a traumatic time, the loss of one’s home, declaring themselves insolvent, there is a lot going on there.  But let’s not get too far a head of ourselves.

Dealing with the here and now is more important than worrying about the future.  A future that is unknown to all of us.

As for this client being able to obtain a mortgage in the future, the answer is possibly.  There are many factors involved in getting a mortgage, as they are aware.  Those factors, such as the deposit, time on job, cost of the property, the market, interest rates, etc; all comprise the answer.  If you cannot contain all those variables, then you do not know.

But the key is for the client to concern himself or herself with the present situation at hand.  They are considering bankruptcy and need to address this and the possibility of the loss of a house and moving their household.  Moving a family in itself is a large undertaking, couple that with the financial stress and it requires your full and undivided attention. 

The future, owning property again, getting credit again, will always be there.  And you can re-establish yourself, that can be a whole other article/book; and the first step and beginning of this process is making sure you handle the here and now properly.

Concentrating on making sure your bankruptcy forms are properly filled out, discussing the situation ad nausum with your partner or spouse if needed.  Communication between partners at this point in time is critical.   Discussing what has happened to bring you to this point, also discussing how you are moving forward, the process of bankruptcy itself.  Spouses/partners may not always be filing for bankruptcy at the same time, it maybe just one person is filing bankruptcy, so the support of that other spouse or partner is critical.

If you are moving, the timing of the move is important.  If you have children, making sure they are comfortable and have a basic understanding of what is happening.  Not to go into great detail with children, but they need to feel comfortable with moving and all that goes with it.

So worrying about being able to get credit in the future seems a bit distant does it not?  The immediate need is to deal with the credit you have now, the credit that has you now.  The future will sort itself out.