There are plenty of indicators that experts use to analyze the state of the economy, and some of them are more relevant in certain areas than others. One that is fairly consistently considered a good measure of the economy is home sales. When interest rates are low and the economy is healthy, more households invest in owning their own home, or even upgrading. But when the economy is in a poor state, there are fewer buyers on the market. Sellers may abandon their goals if moving out would mean a higher mortgage with a higher interest rate. Unfortunately, that second scenario is exactly what is currently going on in the housing market.

Pending home sales, or home sales under contract that have not yet been completed, have reached an all-time low. For the month of September 2026, pending home sales across the U.S. fell month-to-month by 7.3%, and 11.3% year-to-year. There was no region of the U.S. that was an exception to this trend. It was the lowest reading since the National Association of Realtors began tracking pending sales in 2001, lower even than during the Great Recession. With drops that steep, there's no denying that the housing market is in a slump. Sellers appear to have noticed the phenomenon, with fewer new listings coming onto the market. One might think that this would indicate it is a buyer's market, but that isn't true either. Home prices have continued to edge up, and the typical monthly mortgage payment remains high. For a household earning around the national median income, a typical mortgage payment can eat up a large share of take-home pay. In this day and age, that won't leave much after a car payment, insurance, and other bills.

A homeowner on the current market looking to downsize due to affordability may be forced to take a loss or incur debt while waiting for a sale. When debt accumulates, it will grow faster and faster with interest without a serious form of intervention. In many cases, chapter 7 or chapter 13 bankruptcy could be the most effective form of debt relief. But the best way to know for sure is by having your situation reviewed by an experienced bankruptcy lawyer. Our team can do that for you free of charge, as well as see if you qualify to file for no money down. Call 602-509-0955 to set up your free consultation with a Phoenix bankruptcy lawyer from our team today.

Protecting Your Home in a Phoenix Bankruptcy Filing

Many people put off bankruptcy for too long because they are concerned about the implications it would have on their assets. The good news is that most bankruptcy debtors are able to protect their homes through a chapter 7 or chapter 13 bankruptcy filing in Phoenix. This is because of the homestead exemption. Exemptions are set equity limits for certain categories of assets that a debtor can protect in a bankruptcy filing. Exemptions vary by state; there are federal exemptions too, but Arizona doesn't allow debtors to use them. Arizona's homestead exemption protects several hundred thousand dollars of equity, and the amount is adjusted every year for the cost of living. Equity is the home's value after deducting the mortgage balance. So, for example, a debtor could protect a $600,000 home in bankruptcy if they have $200,000 or more remaining on the loan. When equity is right on the borderline, some debtors will take out a new line of credit on their home and spend it on reasonable expenditures to fall back within the exemption limit. However, this can be complicated, so this technique is best executed with an experienced bankruptcy attorney.

Buying a Home After Bankruptcy Discharge

Filing for bankruptcy could be part of a larger plan to purchase a home in the future. Improving credit can help a homeowner secure a better interest rate on their mortgage, which could save them several thousand dollars over the years. There are proactive steps a debtor can take to improve their credit score after bankruptcy discharge, but there are also waiting periods in place for debtors who wish to buy a home after clearing their debts. During this time, the debtor can work on boosting their credit. The waiting periods are as follows:

• FHA loan, Chapter 7 bankruptcy: 2 years after discharge, 1 year with extenuating circumstances
• FHA loan, Chapter 13 bankruptcy: 12 months of on-time plan payments
• USDA loan, Chapter 7 bankruptcy: 3 years after discharge, sooner with extenuating circumstances
• USDA loan, Chapter 13 bankruptcy: 12 months of on-time plan payments, sooner with extenuating circumstances
• VA loan, Chapter 7 bankruptcy: 2 years after discharge
• VA loan, Chapter 13 bankruptcy: 12 months of on-time plan payments
• Conventional loan, Chapter 7 bankruptcy: 4 years after discharge, 2 years with extenuating circumstances
• Conventional loan, Chapter 13 bankruptcy: 2 years after discharge or 4 years after dismissal, 2 years with extenuating circumstances

Rebuilding Credit After Bankruptcy Discharge

The waiting periods listed above can also be an opportunity to rebuild credit after bankruptcy discharge. Rebuilding credit after bankruptcy is all about establishing safe lines of credit and making timely payments on them. While a debtor may receive plenty of credit card offers after discharge, they may come with hefty fees and pricey interest rates. A post-bankruptcy debtor may want to utilize a secured credit card to more safely rebuild their credit. This is essentially a pre-paid credit card that prevents you from spending more than you can afford. Or, you may find someone willing to add you as an authorized user to one of their credit cards, although this can backfire if they don't make their payments on time. Financing any type of asset can help improve credit after discharge, which tips the scales in favor of surrendering a vehicle and purchasing a new one after filing for many bankruptcy debtors. A debtor can also opt in for credit reporting whenever possible to help increase their score. Some landlords, streaming services, and other monthly providers give customers this option, which can be particularly valuable after bankruptcy. If you file for bankruptcy with a post-filing payment plan, these payments can even contribute to rebuilding credit after debts have been cleared.

Do You Have Debts Eating You Out of House and Home? Defy the Current Economy with Chapter 7 or Chapter 13 Bankruptcy

You may have debts from not being able to sell your home, or debt could be what is holding you back from buying a home in the first place. Either way, bankruptcy could provide the debt relief you need to help you reach your financial goals. But there are also significant risks associated with filing for chapter 7 or chapter 13 bankruptcy. Assets can be seized, debts can be left remaining, and a bankruptcy case can be dismissed, making the filing meaningless. Unless you have specific bankruptcy experience under your belt, these issues are best navigated with a skilled bankruptcy attorney. Our Phoenix bankruptcy attorneys make getting the process started easier with free case evaluations by phone and payment plan options starting at zero dollars down. Get started today at 602-509-0955 for more information.