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How Soon Can I Qualify for a Mortgage After Bankruptcy?

Filing for bankruptcy results in an individual or couple getting a fresh financial start. While this opportunity is welcoming for many, it can potentially present some challenges for those who want to make large purchases in the short term, for example, buying a new home.

An individual or couple will not qualify for a home loan until their bankruptcy case is discharged by a judge or dismissed if they did not meet the necessary criteria. Thankfully, the timeline of getting a home loan could be as short as a year, depending on how the bankruptcy proceedings play out.

Seasoning Period

The type of bankruptcy an individual or couple files for will determine how long they will have to wait to apply for a home loan (also known as a seasoning period).

Chapter 7

Chapter 7 is one of the most common types of bankruptcy individuals and couples utilize. After a Chapter 7 bankruptcy is discharged (which typically takes between six to eight months), individuals and couples have a seasoning period of two years at a minimum if they hope to get an FHA or VA mortgage. Those applying for a different mortgage structure have a minimum seasoning period of three years.

Additionally, filers must keep in mind that if they are applying for any loan based upon a credit report, a Chapter 7 bankruptcy will remain on that report for ten years.

Chapter 13

Chapter 13 bankruptcy typically takes longer to discharge as payments are made to creditors over a three to five year period. After that period, any remaining debt is discharged. A Chapter 13 bankruptcy stays on a credit report for seven years.

Keeping those factors in mind, those interested in getting a home loan after Chapter 13 bankruptcy will also have a seasoning period similar to those with Chapter 7 bankruptcy. Individuals or couples looking to get an FHA mortgage will have to wait two years but will also need permission from their bankruptcy trustee and prove that they have made their bankruptcy plan payments on time. Those applying for a different mortgage structure will have to wait a minimum of 12 months and also show proof of on-time payments. If a Chapter 13 case is dismissed, the waiting period is four years.

Questions About Getting a Mortgage Before or After Bankruptcy?

If you are considering bankruptcy, but are also interested in keeping your current home or getting a new mortgage in the future, it’s essential to talk to an experienced bankruptcy attorney. With multiple offices throughout Missouri, you can rely on } to be there for you during this unsettling time. When you schedule a free consultation with our compassionate lawyers, we will present the best options for your financial future. Reach out to us today online or by phone. (417) 213-5006