How Long After Bankruptcy Can I Buy a House?

Mortgage Options After Filing for Chapter 7 or Chapter 13 Bankruptcy After filing for bankruptcy, there are some creditors that will not hesitate to offer you a credit card or some other form of credit. As expected, most of these creditors will charge a high-interest rate, which is expected after freshly having your debts discharged. However, some lenders will have stricter guidelines when approving mortgage loans for a former bankruptcy debtor, especially if a person has recently had their debt discharged.

Federal Housing Authority Loans There are certain Federal Housing Authority (FHA) guidelines for buying a home depending on whether you filed for Chapter 7 bankruptcy or Chapter 13 bankruptcy. If you successfully filed for Chapter 7 bankruptcy and received a debt discharge, you must wait a minimum of two years before you are eligible to receive an FHA mortgage loan. If you received a Chapter 7 debt discharge and you seek to pursue a non-FHA loan, it is possible that you may have to wait three or more years before you are approved. In comparison to the FHA, many banks have strict lending requirements after a Chapter 7 bankruptcy. If you filed for a Chapter 13 bankruptcy, you might have an easier time securing a loan to purchase a house. This is because a Chapter 13 bankruptcy requires you to create a reorganization plan for your debts. The plan allows you to decrease the total amount of your debt and make a three- to five-year plan to pay off your remaining debt. If you do not fall behind on your Chapter 13 payments, you may be eligible for an FHA loan one year into your reorganization plan. The goodwill earned by paying your debts on time with a Chapter 13 plan plays a role in determining whether other creditors may provide you with a loan. In a Chapter 13 reorganization plan, it is important to note that the bankruptcy court and your Chapter 13 trustee will have the discretion to influence your ability to secure a mortgage. Whether you are approved for an FHA loan or a bank loan, the court and the trustee must still determine whether you are able to handle another financial obligation.

Conventional Loans Government-affiliated entities like Fannie Mae or Freddie Mac offer conventional loans to individuals who have filed Chapter 7 bankruptcy or Chapter 13 bankruptcy. However, many of these companies have strict guidelines that may require you to wait several years to receive a loan. If you are seeking a conventional loan after receiving a Chapter 7 discharge, the waiting period could last over four years. However, under certain extenuating circumstances, you may be eligible after only two years. An example of an extenuating circumstance that could decrease the waiting period is having a serious medical issue that forced you into bankruptcy or foreclosure. Additionally, the waiting period after filing for Chapter 13 bankruptcy is two years from the date of your debt discharge or four years from dismissal.

Veterans Administration Loans Veterans Administration (VA) loans have less stringent requirements than conventional loans. For example, you may be eligible for a VA loan two years after receiving a Chapter 7 debt discharge. However, you will have to explain the reason you filed bankruptcy and have a plan to rebuild your credit. To obtain a VA loan after filing for Chapter 13 bankruptcy, you must have a one-year history of prompt payments and the bankruptcy court must approve the loan.

California Bankruptcy Attorneys Offering Free Consultations If you or a family member needs assistance purchasing a home after filing for bankruptcy, you should speak with an experienced California bankruptcy attorney. The experienced lawyers at The Bankruptcy Group understand how difficult it can be to rebuild your life after filing for bankruptcy and we are here for you. Our legal team has extensive experience handling several types of bankruptcy-related claims, and we will use that experience to represent you. To schedule a free legal consultation, call The Bankruptcy Group at , or contact us online.