Some struggling borrows worry that filing bankruptcy will ruin their credit forever, making it impossible to purchase a car or buy a home someday. While bankruptcy and foreclosure can complicate future borrowing, with some diligence and financial discipline, you may be able to purchase a home again within a few years. However, the exact timeline depends on a variety of factors, including the type of bankruptcy you filed and whether your home was in foreclosure.

Buying a Home After Filing Bankruptcy

Different Types of Bankruptcy

One of the most important factors determining the waiting period before buying a house is the type of bankruptcy petition you filed. If you filed for Chapter 7, you’ll have to wait four years before applying for a traditional mortgage loan, or two years for a mortgage guaranteed by the VA or FHA.

Borrowers who filed a Chapter 13 bankruptcy, on the other hand, may be able to qualify for a government-backed loan as soon as 12 months after their discharge date. If you’re applying for a traditional loan, the waiting period is usually two years, as long as you’ve proven that you can manage your finances responsibly.

Foreclosure & Loan Modification

Bankruptcy and foreclosure often go together, which can result in even longer waiting periods before buying a house. If you’ve lost a home to foreclosure, you’ll typically have to wait seven years before being eligible for a conventional loan. The VA and FHA loans may have shorter, more flexible requirements, although you could be facing a four-year waiting period if the foreclosed home was backed by one of these government programs.

If you’re struggling under the weight of debts you can’t repay, filing bankruptcy may help you reclaim your life and start over. For nearly 30 years, the Law Office of James B. Mallory III has helped borrowers throughout the Statesville, NC, area regain control over their finances and find the path the stability. Visit their website to learn more about what to do after filing bankruptcy, or call (704) 872-1911 to discuss your debt relief options with an experienced local attorney.