YOU CAN DO A RENT TO OWN AND DURING THIS TIME IT WOULD BE WISE TO GET ALL YOUR DEBTS IN ORDER WHETHER YOU ARE ABLE TO ADDRESS THEM YOURSELF OR VIA FILING FOR BANKRUPTCY, YES IT WILL BE ON YOUR RECORD BUT IT IS NOT AS HARMFUL TODAY AS IT USED TO BE MANY YEARS AGO DUE TO WHAT HAS HAPPENED IN OUR CURRENT ECONOMEY. LONG STORY SHORT BY THE TIME YOU ARE READY TO BUY YOUR DEBT WILL BE CLEAR AND CREDITORS WILL SEE YOU OWE TO NO ONE AND YOU CAN START TO REBUILD DURING THOSE YEARS.
why not do a short sale instead of the foreclosure? you can always rent with the opt. to buy will be determined by the owner. Forclosure will effect your credit longer.
feel free to contact me if you have any question
If you are filing for personal bankruptcy, the waiting period to purchase again is actually only two years after a short sale or only three years if you do a forclosure. If you do not file bancrupcy the waiting period is significantly longer because your building back your credit over time without the clean slate. Exhaust all short sale options first before you forclosure. I have a great referral for an attorney for you. Good luck to you.
May I ask why are you letting the house go to foreclosure instead of a short sale? Although I am a broker and not a lender, my understanding is it's less damaging to you credit. I have has buyers qualify for FHA loans in as little as two years after a foreclosure depending on the circumstances.
Regarding the rent to own question, most clients I have in a similar circumstance just rent. This way they are not locked in to any one house and have all their options available to them. A good buyers agents can usually structure an offer to include closing cost if you need it which would offset any rent credited toward closing cost. My final point would be that a small percentage of rental will do the lease with option purchase so you limit yourself to a small selections of homes to rent.
Best of Luck, Greg