{"id":5331,"date":"2022-01-03T17:20:11","date_gmt":"2022-01-04T00:20:11","guid":{"rendered":"https:\/\/www.realtyexecutives.com\/blog\/?p=5331"},"modified":"2022-01-03T17:20:12","modified_gmt":"2022-01-04T00:20:12","slug":"can-i-buy-a-home-after-filing-for-bankruptcy","status":"publish","type":"post","link":"https:\/\/www.realtyexecutives.com\/blog\/can-i-buy-a-home-after-filing-for-bankruptcy","title":{"rendered":"Can I Buy a Home After Filing for Bankruptcy?"},"content":{"rendered":"\n
\"a<\/figure><\/div>\n\n\n\n

Going bankrupt is one of the most distressing\nthings that can happen to a person. Some of the common causes of bankruptcy\ninclude burdening medical expenses, job losses, excessive spending on credit,\ndivorce or separation, and heavy expenses due to unforeseen events.<\/p>\n\n\n\n

All of these can be quite taxing on your\nmental and physical health, as well as your financial outlook. On top of that,\nyou may also be worried that you won\u2019t be able to buy a home for yourself and\nyour family anymore, which is an added burden. This article covers everything\nyou need to know about buying a home after filing for bankruptcy.<\/p>\n\n\n\n\n\n\n\n

Is it Possible to Buy a Home After Bankruptcy?<\/h2>\n\n\n\n

Let us put your mind at ease by telling you\nthat it isn\u2019t impossible for you to buy a home after bankruptcy. When you file\nfor bankruptcy, there is no restriction or law that prohibits you from buying a\nhouse, but it will make the process much more difficult. Not only will you have\nto follow certain steps, but you will also have to wait for some time before\nyou can apply for a loan or mortgage.<\/p>\n\n\n\n

Once you are cleared from bankruptcy, you will\nbe able to qualify for a home loan and apply for it. However, it won\u2019t be as\neasy as applying for a loan if you hadn\u2019t filed for bankruptcy. <\/p>\n\n\n\n

Post-bankruptcy Issues to be Addressed<\/h2>\n\n\n\n

When you are planning to buy a home after the bankruptcy status has been cleared, there are some issues that you will need to address before you can go about it. Let\u2019s have a look at the post-bankruptcy issues that you will have to go through. <\/p>\n\n\n\n

Required Waiting Period<\/h3>\n\n\n\n

First and foremost, there is a certain mandated waiting period that you need to complete after you have been discharged from bankruptcy before you can apply for a loan. The waiting period can differ according to several factors, such as the lenders and creditors you have approached, the laws of the state, etc. <\/p>\n\n\n\n

Fixing Your Credit Score<\/h3>\n\n\n\n

Bankruptcy can damage your credit score and credit report significantly, and this hampers your ability to secure a loan to buy a home. When you file for bankruptcy, it may cause your very good credit score to drop by as much as 200 points. Moreover, if you have a fairly good credit score, it may even drop by 150-160 points. Therefore, you will have to repair your credit score before you can even qualify for a mortgage. <\/p>\n\n\n\n

Finding the Best Mortgage Loan<\/h3>\n\n\n\n

Another issue that you need to address is the requirement of finding a mortgage that is fair and represents your circumstances, financial condition, and requirements. There are several companies and financial institutions that provide you with mortgage loans with different types of interest rates and conditions<\/a>, and you will have to review all of them before you make a decision.<\/p>\n\n\n\n

Reviewing the Applicable Filing Rules<\/h3>\n\n\n\n

Lastly, you will also have to recognize the\nfiling rules that apply to your situation, and these depend on where you live,\nthe amount of loan that you need, your credit score, and several other factors.\n<\/p>\n\n\n\n

After How Long Can You Buy a House After Bankruptcy?<\/h2>\n\n\n\n

The waiting period that you must spend before\napplying for a loan depends on several factors, including the type of loan you\nwant and the type of bankruptcy that you have filed for. Some of the types\ninclude Chapter 7 and Chapter 13 bankruptcy.\n\nLet\u2019s have a look at both scenarios in greater detail.\n\n\n\n<\/p>\n\n\n\n

Chapter 7 Bankruptcy<\/h3>\n\n\n\n

Chapter 7 bankruptcy, or liquidation\nbankruptcy, is the most common type of bankruptcy, and it causes most of your\ndebts to be wiped away. However, it has a more severe impact on your credit\nreport, and it reflects in the report for up to 10 years.<\/p>\n\n\n\n

Once your bankruptcy case is discharged, the\nlenders have a mandatory waiting period between two to four years, after which\nyou can apply for a mortgage. More specifically, VA or FHA mortgage programs\nrequire two years, whereas a USDA loan requires a three-year waiting period. Any\nconventional loan can be applied for after a waiting period of four years.<\/p>\n\n\n\n

Chapter 13 Bankruptcy<\/h3>\n\n\n\n

This type of bankruptcy filing is also known\nas reorganization bankruptcy, and it involves periodic payments to clear the\ndebt. Since you are paying the debt eventually, this doesn\u2019t harm your credit\nscore as much as Chapter 7 bankruptcy does. Also, the waiting period to apply\nfor loans is also lower in this type of bankruptcy.<\/p>\n\n\n\n

If the bankruptcy court rules against you, you will have to wait four years from the date at which the judgment was announced. On the other hand, if your case is discharged, you must wait four years from the filing date and two years from the discharge date before you can apply for a conventional loan. Otherwise, you can apply for a USDA loan within one year, and the FHA and VA loan programs have no waiting period. <\/p>\n\n\n\n

In a nutshell, you can buy a home after filing for bankruptcy, and you can do it through a home loan or mortgage. However, there might be several hurdles along the way, especially regarding the bad credit score and the long waiting period. Therefore, it is best if you consult with a professional who can provide you with sound bankruptcy advice<\/a> before you make this decision. <\/p>\n\n\n\n

\n\n\n\n

About\nthe Author:<\/strong> Lyle Solomon has considerable litigation\nexperience as well as substantial hands-on knowledge and expertise in legal\nanalysis and writing. Since 2003, he has been a member of the State Bar of\nCalifornia. In 1998, he graduated from the University of the Pacific\u2019s McGeorge\nSchool of Law in Sacramento, California, and now serves as a principal attorney\nfor the Oak View Law Group in California. He has contributed to publications\nsuch as Entrepreneur, All Business, US Chamber, Finance Magnates, Next Avenue,\nand many more.<\/p>\n","protected":false},"excerpt":{"rendered":"

Going bankrupt is one of the most distressing things that can happen to a person. Some of the common causes of bankruptcy include burdening medical expenses, job losses, excessive spending on credit, divorce or separation, and heavy expenses due to unforeseen events. All of these can be quite taxing on your mental and physical health, … Continue reading Can I Buy a Home After Filing for Bankruptcy?<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":10,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[25,835],"tags":[307,4725,59],"yst_prominent_words":[5589,5578,5585,5570,4218,5572,5590,5586,5587,2626,2624,5596,5581,5573,5593,5595,2144,5594,5588,5579],"_links":{"self":[{"href":"https:\/\/www.realtyexecutives.com\/blog\/wp-json\/wp\/v2\/posts\/5331"}],"collection":[{"href":"https:\/\/www.realtyexecutives.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.realtyexecutives.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.realtyexecutives.com\/blog\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/www.realtyexecutives.com\/blog\/wp-json\/wp\/v2\/comments?post=5331"}],"version-history":[{"count":1,"href":"https:\/\/www.realtyexecutives.com\/blog\/wp-json\/wp\/v2\/posts\/5331\/revisions"}],"predecessor-version":[{"id":5333,"href":"https:\/\/www.realtyexecutives.com\/blog\/wp-json\/wp\/v2\/posts\/5331\/revisions\/5333"}],"wp:attachment":[{"href":"https:\/\/www.realtyexecutives.com\/blog\/wp-json\/wp\/v2\/media?parent=5331"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.realtyexecutives.com\/blog\/wp-json\/wp\/v2\/categories?post=5331"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.realtyexecutives.com\/blog\/wp-json\/wp\/v2\/tags?post=5331"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.realtyexecutives.com\/blog\/wp-json\/wp\/v2\/yst_prominent_words?post=5331"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}