Mortgages

How Soon Can I Buy a House After Bankruptcy or Foreclosure?

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Bouncing back from bankruptcy or foreclosure takes time. But that doesn’t mean you have to shelve your homebuying aspirations for some interminable stretch.

They’re called “boomerang buyers” for a reason.

Consumers may be able to close on a home loan just a couple years removed from one (or both) of these fiscal hiccups. A lot depends on the type of loan you’re seeking and how you handle credit in the wake of your bankruptcy or foreclosure.

Some prospective buyers will struggle to rebound. For others, a home purchase might be feasible but might not be the most financially savvy next step. If you’re set on buying, work hard to boost your credit profile and get a good handle on your mortgage options long before you begin shopping for a home.

Buying After Bankruptcy

The most common consumer-centric forms of bankruptcy are Chapter 7 and Chapter 13. The type you experience will play a role in how soon you can be eligible to purchase a home.

So will the loan product. Different mortgage programs can have different “seasoning periods” following a bankruptcy or foreclosure. Lenders may have their own in-house requirements on top of that.

With a Chapter 7 bankruptcy, the seasoning clock begins when the action is discharged. From that point, you’re typically looking at a four-year wait for conventional loans and a two-year wait for either FHA or VA financing. (The FHA’s short-term “Back to Work” program offers qualified borrowers the possibility of even swifter movement after both bankruptcy and foreclosure.)

Chapter 13 bankruptcies can be a little different. You might be able to land a conventional loan two years after a Chapter 13 discharge. FHA and VA loans are even more lenient.

Borrowers can be eligible for these government-backed loans just a year removed from filing a Chapter 13 bankruptcy. They’ll typically need to show at least 12 consecutive months of on-time payments and permission from the court to take on new debt.

Buying After Foreclosure

Consumers who lose a home to foreclosure can face a considerably longer wait. Foreclosure alternatives (short sales and deeds-in-lieu of foreclosure) and even loan modifications can also trigger seasoning periods.

You’re usually staring at a seven-year wait from the foreclosure date for conventional loans. Borrowers who can show the foreclosure resulted from circumstances truly beyond their control may be able to qualify after three years. But you’ll also need to make a down payment of at least 10%.

Following a short sale or a deed-in-lieu, it’s typically a four-year wait unless there were extenuating circumstances.

You can typically pursue an FHA loan once you’re three years out from a foreclosure or short sale.

VA lenders can approve financing at the two-year mark following a foreclosure. Depending on the lender, veterans and service members may not have to wait at all after a short sale.

While government-backed loans provide more flexibility regarding foreclosure, there is a wrinkle worth noting. If your foreclosure occurred on one of these loans (FHA, VA or USDA), you might face an automatic three-year wait before being eligible for another. Much will depend on whether the default winds up reported to a database that tracks default on federal debt.

Bankruptcy & Foreclosure

Things can get murkier when bankruptcy and foreclosure mix. It’s not uncommon for homeowners to go through bankruptcy and see their home foreclosed on months or even years later. Now you’re potentially talking about two different seasoning periods.

How lenders view this can depend on their guidelines and the type of home loan you’re seeking. Generally, it’s a matter of when you’re no longer legally responsible for the mortgage debt. If it’s truly discharged in the bankruptcy, lenders can essentially disregard the subsequent foreclosure or short sale. You’re not going to be “double hit” with another seasoning period.

Whether you can still qualify from a credit standpoint is another story. Bankruptcy and foreclosure can take a serious toll on your credit scores.

Consumers will often need to spend much of those mandatory waiting periods re-establishing their financial picture. During that rebuilding phase, consumers can track their progress by pulling their credit reports and credit scores regularly. (You can get your credit reports for free through AnnualCreditReport.com, and you can get two of your credit scores for free through Credit.com.)

A bankruptcy or foreclosure definitely adds risk to your loan file. But neither has to be ruinous.

[Offer: If you’re thinking about buying a home, are worried about errors on your credit reports, and you don’t want to go it alone, you can hire companies – like our partner Lexington Law – to manage the credit repair process for you. Learn more about them here or call them at (844) 346-3296 for a free consultation.]

More on Mortgages and Homebuying:

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  • slushpuppy

    We filed bankruptcy on our home in 5/09. The home was not taken out if our name until 12/13. You say above that some lenders will honor the bankruptcy date in order to refinance. Do you know of any specific lenders? No one we’ve talked to will even talk to us until 12/16.

    • http://www.veteransunited.com/ Chris Birk

      Thanks for writing. It depends on a host of factors, including the type of bankruptcy you filed and the type of home loan you’re seeking. Was the BK discharged in December 2013, or does that date reflect a foreclosure sale? You can reach me at chris@vu.com if you’d like to talk in more detail.

  • http://www.veteransunited.com/ Chris Birk

    @Bonnie: Thanks for writing. It depends on a host of factors, including the type of bankruptcy you filed and the type of home loan you’re seeking. The article spells out some of the general time lines and waiting periods. You’d want to talk with lenders directly about their policies and how you might move forward.

  • http://www.veteransunited.com/ Chris Birk

    @Rob: Thanks for writing. I’m assuming this was a Chapter 13 BK, and that’s why the first and second mortgages weren’t fully discharged? Also, is this for a VA purchase or refi? Generally, if it’s in collections it would likely be counted against a lender’s derogatory credit cap. Some may have policies that allow for exclusion from the cap if there’s a history of satisfactory repayment. Hope that helps. You can reach me at chris@vu.com.

  • http://www.Credit.com/ Gerri Detweiler

    Nicole – Have you talked with a lender to see where you stand? They can look at all your financial information and tell you whether you can qualify under programs available now.

  • http://www.Credit.com/ Gerri Detweiler

    I assume you received a 1099-C? That debt itself isn’t reported to the credit reporting agencies, though if you owe the IRS more than $10,000 they may file a tax lien which does affect your credit. Have you read this article? 1099-C In the Mail? How to Avoid Taxes on Cancelled Debt

  • http://www.Credit.com/ Gerri Detweiler

    Yes it’s my understanding that the waiting period is based upon the foreclosure date, but you may want to reach out to a lender like Chris for more details.

  • http://www.veteransunited.com/ Chris Birk

    Thanks for writing. What lenders are allowed to do and what they choose to do can be two different things, often because of requirements and restrictions they encounter when selling their loans on the secondary mortgage market. Fannie Mae is clear: “When both a bankruptcy and foreclosure are disclosed on the loan application, or when both appear on the credit report, the lender may apply the bankruptcy waiting period if the lender obtains the appropriate documentation to verify that the mortgage loan in question was discharged in the bankruptcy. Otherwise, the greater of the applicable bankruptcy or foreclosure waiting period must be applied.” You’ll find that sentence here: https://www.fanniemae.com/content/guide/selling/b3/5.3/07.html

  • http://www.Credit.com/ Gerri Detweiler

    There is no specific answer to your question since it depends on a number of factors including your income, credit scores etc. You may want to talk with a lender after your bankruptcy is complete to put together a game plan.

  • http://www.Credit.com/ Gerri Detweiler

    I am not sure what else to provide beyond the time frames that were outlined in the article above. If you need more specific information about your situation, you’ll need to talk with a loan officer to see what other requirements you’ll need to meet in terms of income or credit scores. So sorry to hear what you’ve been through and hope you are able to start rebuilding your financial life soon.

  • http://www.Credit.com/ Gerri Detweiler

    I’m sorry I’m confused. Why do you need that information?

  • http://www.Credit.com/ Gerri Detweiler

    I am afraid you’re going to need to work with the bank on this. It’s an unusual situation and they are in the best position to advise you on their requirements.

  • http://www.credit.com/ Credit.com Credit Experts

    Here’s writer Chris Birk’s response:
    Thanks for writing. Different lenders and loan types can have different requirements and seasoning periods, so it’s hard to say why you can’t obtain financing. Generally, for a conventional mortgage you’ll typically need a higher credit score. The average FICO score for a conventional refinance in December was 737, according to Ellie Mae.

  • http://www.Credit.com/ Gerri Detweiler

    The story above gives general guidelines in terms of the time periods you must wait before buying a new home but when you get closer to buying you’ll want to talk with a lender about specifics. (Guidelines can change in the meantime as well.) It sounds like you have your insurance and taxes taken care of; hopefully they will finalize it before you have to pay those again. You’ll want to keep current with any utility bills…beyond that not sure what else there is. This article is related to your question: Do I Have to Pay Taxes on a Foreclosed Home?

  • http://www.Credit.com/ Gerri Detweiler

    Congrats on the progress you’ve made since your bankruptcy.

    Have you talked with a lender? It sounds like the next step. The lender can look at all the factors – income, debt, credit etc and let you know what your options are.

  • http://www.Credit.com/ Gerri Detweiler

    It may be possible to qualify sooner under the FHA Back to Work program we link to above, provided you meet the program qualifications. Have you looked into that?

    If not, it sounds like you are very close to the two year date. Can you hang in until then and get everything in order so you are ready to pull the trigger then?

  • http://www.Credit.com/ Gerri Detweiler

    I am not sure I understand your question. If your bankruptcy is discharged you can do what you like with your money. Are you asking what happens to the house you are living in? If so that’s a question for your bankruptcy attorney….

  • http://www.Credit.com/ Gerri Detweiler

    It’s wise you’re planning ahead. Hope it works for you one way or the other.

  • Steve

    I had a foreclosure on a property that will be seasoned by 7 years in July 2016. I would like to purchase a new home for 550000 and am willing to put down 300000. Since construction time is 10 months will I be able to apply for a mortgage before July 2016 if I close after July.

    • http://www.veteransunited.com/ Chris Birk

      @Steve: You could talk with lenders about preapproval before the seasoning period ends. Different lenders can have different polices and procedures.

  • Clinton

    We had our chapter 13 discharged in February 2015. We have zero debt, 65,000.00 in savings and IRA accounts, and fair FICO score in the high 600’s. We are retired with a guaranteed income. We are spending too much on rent and want to buy a house. Is it too soon?

    • http://www.veteransunited.com/ Chris Birk

      @Clinton: You may be able to obtain an FHA or VA loan once you’re a year removed from the filing date of a Chapter 13 BK. A history of on-time payments during that stretch will be key.

      • Clinton

        Thanks for the help.

  • nick

    i am 2+ years out of chapter 7 bankruptcy and am looking to buy a home. my credit score is 700 with $6k worth of credit cards at 0-5% use. The house I am looking on buying, I would be putting down a $120k down payment and hoping to finance an additional $50k. Is this possible? will i get the loan?

    • http://www.Credit.com/ Gerri Detweiler

      Nick – We encourage you to get preapproved. The lender can to through all your information and help you determine if you qualify.

  • Michelle

    My husband and I have bankruptcy and a foreclosure on our credit report. It’s been 3 years since the bankruptcy was discharged. The foreclosure clears off our credit reports in May (of this year). Both our credit scores are 680+. (Plus we have $15k in our savings account.) Question: We are wanting to buy a house (soon) and want to know if waiting for the foreclosure to clear off our credit will make a difference in our credit score and/or the APR we could get? Basically, can we just get prequalified now, or is there a benefit for us waiting another 8 weeks for that foreclosure to clear off? Does it really matter? Thanks for your insight!

    • http://www.Credit.com/ Gerri Detweiler

      It’s hard to predict how much the score will change. If there was just a foreclosure I’d say wait. But with the more recent bankruptcy that is probably carrying more weight than the old foreclosure. Still, if I were in your shoes, I’d probably wait.

  • http://www.Credit.com/ Gerri Detweiler

    We tried in this article to give the guidelines for most mortgage programs. Beyond that it’s a good idea to talk with a mortgage lender to find out specifically what is available.

  • Kim

    My bankruptcy was discharged 9 years ago and our house that was discharged in the bankruptcy was foreclosed on in 2013. The underwriter is telling us that by staying in the property, to her, is reaffirming the loan (which we never did) and therefore is denying us. We are told that we have to wait until 2016 even though that mortgage was part of our bankruptcy from 9 years ago!

  • http://www.veteransunited.com/ Chris Birk

    @robert: Thanks for writing. Lenders can have their own policies for how they handle post-foreclosure purchase situations. You’d need to talk with individual lenders about how they’d view your situation and what might work. Unfortunately, there’s no blanket answer.

  • Joseph

    Hi, I recently came across this blog and really love the posts. My question is, I was a co signor on a mortgage with my mom about 10 years ago. However we filed for bankruptcy and included the house in March 2008 and everything was discharged in July 2008. I’m approaching my 7th year, and most items are not showing up on my credit report. However the house was not foreclosed as of yet and the item is only showing up on my credit report as “closed” and included in bankruptcy. The item is said to be deleted in July. Once it’s deleted from my report, will I be able to obtain a FHA loan? Also it’s only showing on one credit bureau. It’s not showing on transunion and equifax. And it will be deleted from experian in July. Once deleted will I face any hurdles ? Would the house still affect me since I have “no mortgage”on my report?

    • http://www.veteransunited.com/ Chris Birk

      @Joseph: Thanks for writing. Generally, you could look to obtain an FHA loan now. Seasoning periods for government-backed loans are shorter than conventional loans. You’d need to talk with individual lenders about what might be possible.

    • ron

      I had a chapter 7 discharged in December of 2010, just paid my second mortgage off and have been trying to refinance or buy a home, I have an 7.5 interest rate and 5 years later they are telling me I have to reaffirm my loan or sell it and it will be considered a foreclosure then wait another 3 years to buy a house,,, I’m a little upset and confused to say the least . Can you suggest anything? ?

      • http://www.veteransunited.com/ Chris Birk

        @Ron: Thanks for writing. It’s hard to say for sure without more information, but you might keep talking with different lenders about their post-BK policies and what might be possible.

  • Lisa J

    I’m looking to file bankruptcy soon but very hesitate in regards to the stories I’ve been hearing. I don’t own a home, I’m currently renting and the only thing I own is my car which is paid off. I just would like to know am I able to purchase a home and or car if I file bankruptcy and it is discharged? If so, how soon after?

    • http://www.Credit.com/ Gerri Detweiler

      Lisa – The author of the article above laid out the basic guidelines for getting a mortgage after bankruptcy as they currently stand. Sometimes those do change, though lending standards seem to generally be getting looser. The article lays out how long it takes to get a mortgage after bankruptcy depending on which type (chapter) you file. I am not sure what additional information you are looking for…?

  • Sylvia Garcia

    I filed for a BK Ch.#7 in 2014. The BK was discharged 11/3/14 but my question is.. What if I didn’t include my home? in fact, I am in great shape with my home payments and LTV etc.. I just want to know how long do I have to wait to refinance because I’d like to get a lower payment if possible or change my mortgage company as they’ve become a big problem ever since I went thru my BK. They refuse to help me on obtaining information online and they’re not even reporting my home mortgage on my credit.. I’ve gone back and forth with them but apparently I had to file a specific paper and my Attorney didn’t.. so although I have quite a bit of equity on my home my account isn’t even showing on my credit report which in turn is affecting me.. Needless to say I really want to change my mortgage companies as soon as I can. Thanks.

    • http://www.Credit.com/ Gerri Detweiler

      Sylvia – It sounds like you did not reaffirm your mortgage in your bankruptcy. Your attorney may have had a very specific reason for this. Before you refinance with a new loan, make sure you talk with your attorney to find out why you didn’t reaffirm the debt. Sometimes that is in the borrower’s favor. This article may help: Why Isn’t My Mortgage on My Credit Report?

      • Sylvia Garcia

        Gerri,
        Thanks for the article it helped me clear alot of doubts. My Attorney told me that the reaffirmation wasn’t submitted for my own benefit as the article states..But, I still have a doubt. Is it a good idea to refinance with another company or just wait the time until the loan is paid off – for the purpose to making sure the mortgage payments are being reported or does it even matter that much that my mortgage payments aren’t being reported to the credit bureaus..? I get statements but I want to know what the best scenario is in rebuilding credit after my BK.. since right now it shows that I only have secured cards and a vehicle loan.

        • http://www.Credit.com/ Gerri Detweiler

          Sylvia – You can still rebuild your credit without a mortgage. I’d suggest you take your attorney’s advice and just focus on the other methods you are using to rebuild your credit. It sounds like you are on the right track. (Make sure your reported balances on the secured cards stays low.)

  • Lisa

    It’s been 3 yrs and 5 months since our Chapter 13 Bankruptcy was discharged. We are seeking to purchase a new home, can we qualify for a conventional loan.

    Thanks
    Lisa

    • http://www.Credit.com/ Gerri Detweiler

      Lisa, Your best bet is to try to get prequalified for a loan. The time since your bankruptcy is one factor of several that will determine whether you qualify.

  • Chuck

    We did Chapter 7 over 4 years. We got to keep the house but never reaffirmed. The loan was for a 10 year interest only and balloon payment. We want out before the balloon payment hits. ($2000 mortgage payment coming). Can we apply for a new purchase mortgage w/o mentioning the current home since it was part of te bankruptcy agreement. Our attorney said we could walk away. What is teh catch?

    • http://www.veteransunited.com/ Chris Birk

      @Chuck: Thanks for writing. I’m a little unclear. Did you include the mortgage debt in the bankruptcy and just continue sending mortgage payments to the lender? Or was the mortgage debt not included in the BK?

      • Chuck

        We did not claim it.

        • http://www.veteransunited.com/ Chris Birk

          @Chuck: Your best bet is to talk with individual banks and lenders about their policies and what might be possible. Generally, yes, if the mortgage debt is discharged in a Chapter 7 BK, then you’re not legally responsible for the debt and can walk away. But some lenders may have specific requirements for when people don’t reaffirm and continue living in the home.

  • kellis

    I’m very nervous about claiming bankruptcy. My score is poor and my husband’s is very poor, 514. I really don’t know what to do. We need a home of our own. Rent is very high where we live. My husband’s worked st the same company for 19 years and we retire from this company. He makes good money but due to helping take care of my step father for 4 years after my mother’s passing, we did put our credit work and older bills on hold. Stupid, I know. Please help

    • http://www.credit.com/ Credit.com Credit Experts

      Kellis —
      Have you talked to a bankruptcy attorney? That is a good first step to know if bankruptcy is even an option. It can be your best hope for raising your credit score if your debt is just too high for you to ever pay off. As far as your credit scores go, your best bet to raise them is to pay all bills on time and to keep balances low. Here are a couple of Credit.com resources that might be useful to you:
      How to Rebuild Credit
      When Should You Consider Bankruptcy?

  • sylviag

    I filed for a Ch#7 BK in 2014. My home wasn’t reaffirmed per the Attorney’s suggestion. As a result my mortgage account isn’t being reported on my credit. I do however have monthly statements being mailed to me as well as all payment receipts.
    My concern/question is.. can I qualify for a HELOC with my credit union if my mortgage account isn’t being reported on my credit? I have over 100k in equity and I could really use some home improvements.

    • http://www.Credit.com/ Gerri Detweiler

      You’ll need to talk with the credit union and find out what they are willing to do. Lenders have varying requirements. It doesn’t hurt to ask.

  • http://www.Credit.com/ Gerri Detweiler

    I’d like to modify my answer. Talk with your attorney. The fact that you did not reaffirm your loan does not mean you own the home free and clear. You may have to reaffirm the other loan in order to get the HELOC, but honestly I am not sure. Your attorney is the best source to consult regarding the pros and cons of this move.

    • sylviag

      Gerri thanks again.. Am I understanding correctly…? What I get from your message is that I don’t own my home free and clear and that although the mortgage has been paid up to date – due to the BK filing – this might have affected my ownership? Or what do you mean by having to reaffirm the “other” loan? I apologize I just want to clarify. Also, I did speak to my Attorney and he said that he would be happy to re-open my case and reaffirm my mortgage but he’s also seeking to charge my another $3k which is what I paid to file in the first place which honestly feels unfair considering these are the things he should have consulted with me during the process and he failed to.. (this is an entire different story) but this is why now I’m stuck trying to figure things out on my own :/

      • http://www.Credit.com/ Gerri Detweiler

        We wrote about reaffirming mortgages in this article:
        Why Isn’t My Mortgage on My Credit Report?. The mortgage has not been paid in full, correct? Then it’s my understanding you won’t have a free and clear title to the home until it is. (Generally if someone doesn’t reaffirm their mortgage, the lender still has a lien on the home until the loan is paid in full, but they aren’t personally responsible for the debt.) Your credit union may not have a problem with this scenario since you have plenty of equity but you’ll need to talk with them. Just be upfront about it. They will do a title search and find the lien anyway.

        • sylviag

          Ohhh.. Ok I understand.. Thanks Gerri I’ll have to speak to the credit union then.. I sure hope this isn’t something that interferes with this.. I keep reading different articles and some say one thing and other say the opposite so its quite confusing :/ Thanks again.

          • http://www.Credit.com/ Gerri Detweiler

            You’re welcome. Let us know what they say.

          • sylviag

            Thanks again Gerri.. I’ll make sure and post what I get as a response..

  • Kevin

    Chris – I went through a foreclosure back in 2009 (6 years ago), but only recently filed chapter 7 bankruptcy in Feb 2015 (we did list the foreclosure in the list of creditors, even though the foreclosure was 6 years ago). The house in question and included in the foreclosure was actually sold back in 2010 to a new owner, and deed is not in question. I am rebuilding my credit and would be interested to know how long you believe I will need to wait to buy another home. Thanks for any thoughts you can provide.

    • http://www.veteransunited.com/ Chris Birk

      @Kevin: Thanks for writing. It would probably depend in part on what kind of financing you’re looking for and what lenders you talk to. For FHA loans, it’s likely two years from your BK discharge date. For conventional, it’s likely four years.

      • Keith

        If you have 20% down could you buy a house before the 2/4 years?

  • Compu Byte

    Hi Chris. .

    Okay. this one may be a bit different. we filed a BK Chap 13..
    we are till paying on it. but will be paying it off shortly.. the house we let go.. and everything else was on a chapter 13 repay.. @ 100%
    So as it turns out we have a windfall sort of coming out way in about 3-6 months.. were not sure on the amount. but we’ll be 100% debt free when it arrives. and i’m told it could be anywhere in the $500,000 range.. give or take another $100k ..
    So my question is . if I have a freshly paid off BK .. I was thinking of being smart this time and out right purchasing a home so as not to have to worry about losing it. but even with bad credit and a recent BK.. would I be able to purchase a home right away with a loan if I say put down just 50%? .. i’m guessing it’s a moot issue if i’m paying cash for the whole thing thou? I wouldn’t have to worry about a morg. at all. but my thought was putting 50%-75% down and having a small monthly mortgage payment would help build the credit??

    are these options viable to me with a Very Recent BK with that much money down? or will the BK still prevent me from a loan that soon?

    Thanks
    Frank

  • Tiffany

    I have a question. We filed Chapter 13 in December 2012. We received some inhertiance and ended up paying the bankruptcy in full in October 2014 before it was up. They discharged it and now we want to buy a house. Can it be done? If so who do I go to? Thanks

  • Robert Hunter

    Due to an injury at work in 2010 we filed BK chapter 13 in 2011 and we surrendered the house. We completed and discharged Feb 2015. We now have enough to give %50 down payment on a $130,000. Would a bank give us a mortgage considering we were just discharged?

    • http://www.veteransunited.com/ Chris Birk

      @Richard: Thanks for writing. It would depend on the type of financing you’re considering and the lenders themselves. FHA and VA (if you’re eligible) may be your best bets, if not your only options. You’d need to check with lenders about what might be possible.

      • Tony

        Chris Birk,
        I filed bk 7 May 2011, discharge date August 4, 2011, I am in the process of getting a conventional home loan, will I be eligible on Aug. 4, 2015 to proceed with the conventional loan? Mortgage company had pre-approved me for a conventional loan, my builder started building my home and then the mortgage company realized they made a big misstake, the house is finished at this point, but we are waiting on Aug, 4th 2011 to apply again, who would be responsible for penalty fees from the builder at this point?

        • http://www.veteransunited.com/ Chris Birk

          @Tony: You’d need to talk with individual lenders about their policies regarding your BK discharge date and when you might be able to close on a loan. As for penalties, that’s probably a better question for an attorney.

  • Corey

    I was foreclosed on late 2013, but now am looking at a home that I would really LOVE to buy. I have MORE than 20% to put down and my credit rating has improved to “fair” after paying off a slew of debts. What banks are people finding that are ok with working with me as long as I have 20% down?

    • http://www.Credit.com/ Gerri Detweiler

      We can’t recommend specific lenders here, and programs change. But it sounds like it’s time for you to reach out to a few lenders to find out what programs may be available.

  • Jeff Hinds

    We filed a chapter 7 in 2010 due to a business failure, we had a large debt load. Trying to save our business we maxed out every credit card and line we had which was considerable. The 7 discharged our debt, we signed over our commercial properties and personal. Shouldn’t the 7 stand above the single lines on our credit report. Many creditors took the amount owed off our report since it was discharged after bankruptcy. Some others would not. If the debt was discharged should it not be taken off the report?

    • http://www.Credit.com/ Gerri Detweiler

      It’s a very legitimate question that has been challenged in court recently. Read this New York Times article about credit reporting after bankruptcy. You may want to file a complaint with the CFPB and/or get a consumer law attorney involved.

  • http://www.Credit.com/ Gerri Detweiler

    If I understand you correctly you are not personally liable for the home loan debt anymore correct? (You did not reaffirm it.) However, you still have a house that appears in your tax records under your name. So if you try to buy another property you may have to buy it as a second home or investment property. But I’d suggest you go ahead and talk with a loan officer to make sure. We have a story coming out soon about foreclosure after bankruptcy that may be applicable. (And are you sure that the house will never be yours, even if you pay off the loan? That’s not generally the way it works. Discuss that with your bankruptcy attorney before you make any decisions.)

  • http://www.Credit.com/ Gerri Detweiler

    Second homes and investment properties are somewhat different. But since it sounds like you are anxious to get out of your current home, I would suggest you talk with your bankruptcy attorney about whether it makes sense to do a deed-in-lieu of foreclosure to disassociate yourself with this home. It’s possible that will allow you to buy another home as your new primary residence at better terms than one of the other types of loans.

  • http://www.Credit.com/ Gerri Detweiler

    The article above tries to spell out the guidelines for getting a home loan after bankruptcy. For more specifics, you’ll need to talk with a lender.

  • spotts

    Hi Geri….. Last year I lost job after the company was sold. I have since fallen behind in my all my utility bills and have paid my rent late. I finally found employment after almost four months but at half my former salary. I did Not have good credit prior to my job loss but was earning credit in a program sponsored through Sears. Of course now that’s even shot. I am about $20K in debt which includes a car tax bill of $8k, a few old credit card collections and about $4k from old landlord (the amount is wrong. I only owe half a month in $850 rent – I think it’s the original amount ). Working a third shift at nothing more than 16-24 hours a week, with two teenagers, no child support single mom. No savings, no car, never had a mortgage. I’m trying to get a better job ($15 am hour) and attend the local community college this fall. …. I believe it’s possible. I lost my courage and confidence after so many job rejections. I’m seriously thinking about bankruptcy to be done with it all. How soon there after am I eligible to apply for credit to rebuild and then how soon can I get a mortgage if I get my fico up? I’m mid forty and I just don’t see how I can ever get ahead to have a stable home for my girls in a good neighborhood.

    .

    • http://www.Credit.com/ Gerri Detweiler

      I would definitely encourage you to at least sit down with a bankruptcy attorney to find out whether that option might help you. Sometimes consumers can rebuild their credit faster that way than if they continue to struggle and throw small amounts of money at their debts. So I’d say meet with one and find out if it can help you.

      It sounds like you’re tenacious — rooting for you!

  • Stella

    I filed Chapter 7 April 2014…I know I’ve been told to wait 2 years before I can qualify for a home loan. I do not qualify for the back to work program because they won’t consider a divorce. My credit score is 659 and 621 with another. I have managed to save $25,000 and would like to use this for a down payment for an investment property. I lost my former home in the divorce and signed it over to my X. Then got custody my children after he moved out of state and rented the home. I’m currently paying high rent due to having full custody of my 3 children. This coming year I will have joint custody of 50% now that my x is moving back and into his home. I will need to move to a smaller place now that my child support will be cut down and the kids will be gone every other week. I would like to invest in. 2/2 condo. My income will be about $4500 a month. What do you think should be my next step???

    • http://www.credit.com/ Credit.com Credit Experts

      Stella —
      Working to build your credit score so that you can qualify for a loan with relatively low interest should probably be your next step. You certainly can talk about a mortgage broker about where you are and what your options are as well. Here’s how to monitor your credit score for free. You can find tips for rebuilding credit here: How to Rebuild Credit

  • Kat

    Hi. I filed Chapter 7 bankruptcy in 2009 anf my 1st and 3rd mortgage was included. I did not reaffirm. The home is my primary residence. It’s has been 6 years since the bankruptcy. Both mortgages are bad-one is a arm and the other a balloon. The mortgage with the Balloon will occur in the 4 years. I want to get out of these 2 mortages. I tried refinancing at least 8 times and was declined due my income which is $50,000. My husband name is not on the mortgages nor has he filed any bankruptcy. His credit score is around a 650. Mine is 620. His income is $40,000. We want to buy a home and get out of the 2 bad mortgages that we currently have. I am thinking we should go after a conventional loan but I’m not certain. We don’t qualify for a VA loan. What are my options? My home is upside down. Should I do the short sale? If so will we have to wait before getting approved for another mortgage since it’s been 6 years since BK? We will need a place to place to stay in the meantime if the home is short sold. Should I look at a rental in the meantime?

    • ScottSheldonCaliforniaLender

      Hello,
      The Bk shouldn’t be so much of an issue with you qualifying as what you intend to do with the property. If you are trying to purchase another home after short selling this home the waiting time is 3 years for an FHA loan or 4 years for a conventional loan.

  • CChadd

    I had my home foreclose in 10/2010 due to loss of a job for my husband and my discharge date for bankruptcy chapter 7 was 09/2013. we have established credit again and have established long tenured jobs. Would you think that we would be at a good enough time length from each event to qualify for a FHA loan?

    • http://www.veteransunited.com/ Chris Birk

      You may be able to obtain an FHA loan once you’re two years out from the BK discharge date. You’d need to talk with lenders about their policies and what might be possible.

  • Margaret Thomas

    We had a chapter 7 bankruptcy discharged in August 2013. Our home was surrendered in the bankruptcy. The lender just did a short sale on the property in April. Would I be eligible for an FHA loan now or do I have to wait three years from the short sale?

    • http://www.Credit.com/ Gerri Detweiler

      Read the part in this article that links to the Fannie guidelines: Can I Walk Away From My House After Bankruptcy?

      • Margaret Thomas

        Thank you for your response. If I am reading the article correct if the lender goes by Fannie guidelines then they would go by the BK date for us to qualify. I thought that was correct but was just told that I had to wait an additional 3 years. On my credit report it shows the mortgage was discharged with the BK. The short sale does not even show.

        • http://www.Credit.com/ Gerri Detweiler

          Make sure the lender you are working with is familiar with the newer guidelines.

  • Matthew Hands

    Hello, I was discharged from my Chapter 7 Bk 5 years ago and I’ve reestablished my credit since then and have a good amount of money to put down. Unfortunately my house that Included in the Bk is still under foreclosure process and has not sold!! How do I buy a house?!

    • http://www.Credit.com/ Gerri Detweiler

      If you did not reaffirm the debt that you may be able to buy a house. We wrote about that in this story:

      Can I Walk Away From My House After Bankruptcy?

      You’ll need to find a lender who understands these regulations and can walk you through the process.

  • http://www.Credit.com/ Gerri Detweiler

    @Jason – You can reach out to Veterans United, where Chris works, directly for the answers to your questions.

  • Penny Broffman

    We put our house in our Ch 7 bankruptcy 1.8 years ago. Having a terrible time finding a lender because Bank of America still has NOT foreclosed and the house seems to be in our name still even though we included it in the bankruptcy. Our lender at last minute said we had to wait one year after foreclosure and the bankruptcy doesn’t matter. We were supposed to close next month and have watched our house go up only to be told we couldn’t get approved EVEN WITH 20% DOWN and 700 credit score!! My family has been through my daughter’s illness and we lost our home. This latest blow is heartbreaking. Does anyone know of a lender who will waive the foreclosure limbo if our house was surrendered in Chapter 7?

    • http://www.Credit.com/ Gerri Detweiler

      I assume you did not reaffirm your loan. Have you talked to your attorney about whether you can deed the home back to the lender? Deed in lieu of foreclosure perhaps?

  • Caroline

    I have a question? My husband had done a chapter 7 bankruptcy this past March 2015. Before he had done the bankruptcy he was in the navy he was qualified for the VA certificate at the time so we could start looking for a house. but when he got out of the navy in JULY 2014 all the bills starting piling up from his previous marriage and along with child support and so he ended doing the chapter 7 bankruptcy. because he didnt have that income anymore. he is going to school on his Voc rehab benefits and disability benefits with the VA So my question is when is it a good time to try and apply for a first time to buy a home or do we need to wait? his bankruptcy was finalized in March 2015. I in the other hand have no job i am a stay home mother, i have a good credit score 644. I am just trying to plan ahead to look forward for a better future for us but the right way. im just curious to know what we can do.

    • http://www.Credit.com/ Gerri Detweiler

      As Chris mentioned in the article, generally you need to wait two years after your husband’s Chapter 7 bankruptcy has been discharged. Those things can change, though, so you may want to check into VA loan guidelines periodically.

  • DD

    We filed chapter 13 and was discharged in may 2014, I was working with my mortgage holder all the way thru. TO save him money, we signed our deed over to him after the bankruptcy to keep him from having to do for closer. He even gave us money to help on the move. We have 16 months of paying rent on time. We did not own the trustee nothing. They refunded our money back to us. How long before we can buy another home? ? ? We were upside down on our home, double the amount it was worth, because of hardship from 1 of us becoming disabled from a car accident. How long before we can buy a home.

    • http://www.Credit.com/ Gerri Detweiler

      The article gives the guidelines available at the time:

      “Chapter 13 bankruptcies can be a little different. You might be able to land a conventional loan two years after a Chapter 13 discharge. FHA and VA loans are even more lenient.”

      Sometimes they change, though. so it sounds like it might be time to talk with a lender to find out what your options are.

  • DD

    Also our home was sold in March 2015. Please help. Our credit was exllent before this. Then it went to poor. Now it is good. How long before we can buy again. Also we never lost our charge cards. Just could not use them until bankruptcy was done. All our bills have always been on time. 1 problem. Our daughter had her dad Co sign for 2 student loans, and I just found out she did a hard ship on herself, but it shows on his credit. What can I do about this. I just found out yesterday. She says she does not own it until she graduates May 2016. He is not aware of this cosign. Very complicated. Thank you for any information.

    • http://www.Credit.com/ Gerri Detweiler

      It sounds like the next step for you would be to talk with a trusted lender to find out what you need to do to qualify to buy a home again. Or there may be a local counseling agency that will review your credit and provide you with that type of advice. This article provides options: 6 Places to Get Free Help With Your Credit Problem

  • QT

    I am in the process of filing bk, I never owned a home before but if I decided to go through with the bk how long would I have to wait until I can purchase a house?

    • http://blog.credit.com/ Kali Geldis

      Hi QT —

      Here are the relevant details from you from the article above:

      With a Chapter 7 bankruptcy, the seasoning clock begins when the action is discharged. From that point, you’re typically looking at a four-year wait for conventional loans and a two-year wait for either FHA or VA financing. (The FHA’s short-term “Back to Work” program offers qualified borrowers the possibility of even swifter movement after both bankruptcy and foreclosure.)

      Chapter 13 bankruptcies can be a little different. You might be able to land a conventional loan two years after a Chapter 13 discharge. FHA and VA loans are even more lenient.

      Borrowers can be eligible for these government-backed loans just a year removed from filing a Chapter 13 bankruptcy. They’ll typically need to show at least 12 consecutive months of on-time payments and permission from the court to take on new debt.

  • KS

    My wife are looking to get a FHA Mortgage for under $100,000. Our FICO scores are around 687. We had a Chap 7 BK that was discharged back in November 2006 which included our mortgage. The actual sale date of the house was not completed until August of 2012. Will the underwriter use the discharge or the actual sale date when it comes to the foreclosure for seasoning purposes ? We currently have no debt and no other derogatory information in our credit history. We have had steady employment with no gaps fro the past ten years. Also, we would like to find a lender with out a lot of “overlays” when it comes to underwriting. We are in the Tampa Florida area. Thanks.

    • http://www.Credit.com/ Gerri Detweiler

      I believe you’ll find the current guidelines here: https://www.fanniemae.com/content/guide/selling/b3/5.3/07.html

      • GP

        Hello,
        File for Bk7 in Dec2011 discharged on April 2012. Two loans were reaffirmed on my bk7, meaning i was still responsible for the debt. I shortsale my house because i had to move town due to work related issues. My house was sold sept 2014, but as of right now on my credit reports shows as dicharged on bk. Do you know why if the debt was reaffirmed and then settled with shortsale.

        • http://www.credit.com/ Credit.com Credit Experts

          No; the bank might have an answer though.

  • clarkie segreaves

    I just filed chapter 13 2015 we own a home and want to sell and move from Arizona to Florida will I be able to get a loan for another home until the house we are living in sells to pay off the new home?

    • http://www.Credit.com/ Gerri Detweiler

      That’s a recent bankruptcy so that may be a hurdle for you as we described in the article. In terms of buying another home while you still own this one, did you reaffirm your mortgage on the home you are living in now? If not, you may be able to walk away. If so then you’ll have to be able to qualify to buy another one while you still own this one. Can I Walk Away From My House After Bankruptcy?

  • Clinton

    Hi I filed chapter 7 in October 2013 was discharged in December 2013 have never been a home owner but I do want to buy now just looking for help to guide in what I need to do

  • Nick

    My wife and I filled chapter 7 bankruptcy 6 months ago and got new credit and have made all on time payments we would be first time home buyers wanting to buy a home how long do we have?

    • http://www.credit.com/ Credit.com Credit Experts

      Talk to a lender and ask. You may also want to know what sort of interest rate you would be paying and whether waiting would likely drop that. Have you saved a down payment this quickly after bankruptcy? You might want to make sure you have an emergency fund as well. Here’s more:
      Are You Financially Ready to Buy a House?

  • the_get_man

    Sounds like you don’t want to buy a house than if you don’t want to put 20% down

  • Mike

    I filed for bankruptcy about 10 years ago I have a few outstanding bills like an old cell phone bill and a few other little things but I have about 60 to 80,000 to put down this house we seen for about 160,000 what are my chances and what interest rates can I get with a my down payment

    • Jeanine Skowronski

      Hi, Mike,

      The loan approval and interest rate will also depend on your credit score so you may want to pull yours to see where you stand and get an idea of what you may qualify for.

      Thank you,

      Jeanine

  • Richard Alexander

    So I filed BK Chapter 7 Sept 8 341 meeting.
    I did not have a home just CC debt score about 535 to 600.

    How do I need to wait before I can get any kind of mortgage.
    I know it has to discharge at least then how long…..

    • Jeanine Skowronski

      Hi, Richard,

      Chapter 7 bankruptcies can stay on your credit report for ten years from the filing date. The effects on your score will lessen over time, if you stick to stellar payment behaviors. Mortgages generally require at least a 620 credit score.

      Thank you,

      Jeanine

  • Fulton

    My House was foreclosed on 2 years ago, do I have to file bankruptcy to ever be considered for a loan? Is is possible to not file and still get any type of loan in the future?

    • Jeanine Skowronski

      HI, Fulton,

      A foreclosure generally takes 7 years to age off of your credit report completely, though its effects will lessen overt time. A bankruptcy would also appear on your credit report and it can take up to ten years to age off of it. The bankruptcy doesn’t wipe your slate clean in regards to applying for loans. In fact, it will seriously hurt your credit score.

      Thank you,

      Jeanine

  • RepurposeRelics&Fashions

    I was foreclosed on and the same month the house sold, in Oct 15. I have not filed Bankruptcy. I do NOT know what to do next? Should I file bankR? Or just wait a few years to apply for another loan? I agreed with mortgage to give the keys but did not get any move out funding that may/may not be avail because I could not go through their program which started out or STEP #1 was to re modify the loan. I COULD not do this (another story) but, mortgage co. stopped working with me after I refused to do a modify?
    What shall I do? My credit score is not really horrible, surprisingly! I MAY have to get an attorney but I want to understand my options before. I do not want to be convinced into a bankruptcy if I do not have to. Thanks

    • Jeanine Skowronski

      It may be best to consult with a bankruptcy or consumer attorney about your best options, since there are so many specifics involved here. Some do offer free consultations.

      Best,

      Jeanine

  • Jeanine Skowronski

    You may want to consult a consumer or bankruptcy attorney about your options.

    Best,

    Jeanine

  • Paul

    I had a foreclosure in 2011 but didn’t file chapter 7 until 2015. The chapter 7 discharged officially in sept 15. So how long would my seasoning period be?

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