Many people assume that a bankruptcy means there is absolutely no way to obtain credit—let alone a mortgage—until it is off the credit report in 7-10 years. However, this is not true. You can obtain a mortgage in much less time than this, but you will need to wait. A Bankruptcy attorney in College Station can advise you on your options, but the following provides some general information.
When You Can Obtain a Mortgage Again
In some cases you can obtain a mortgage fairly quickly after a bankruptcy is discharged. The following list of types of loans shows how long you might have to wait:
- Conventional Loans: You will have the most difficulty getting a conventional loan after filing bankruptcy. After your Chapter 7 is discharged you will need to wait four years; after a Chapter 13 discharge your wait period is two years.
- FHA and VA Loans: After your Chapter 7 bankruptcy is discharged, your wait time for either of these types of loans is two years. You do not necessarily have to discharge your Chapter 13 before obtaining an FHA or VA loan provided that you have been successful at paying as per your plan for 12 months and you have court approval.
- USDA Loans: These require a three year wait after a Chapter 7 discharge, and 12 months of making payments on a Chapter 13 or a year after the Chapter 13 is discharged.
Rebuilding Your Credit Worthiness
The figures given above reflect minimum wait times. If you run into trouble financially after a bankruptcy you will jeopardize your credit worthiness and ability to obtain a mortgage. Here are some tips on how to rebuild your credit:
- If you have a couple of loans that were not included in the bankruptcy, say for cars, make sure to pay them on time.
- After your bankruptcy is discharged, and maybe even before, you will begin to receive many offers for credit. This may seem strange, but creditors know you can’t file bankruptcy again for many years. Make sure to limit the number of credit cards you have, and keep balances low.
- Keep track of your credit report for inaccuracies.
- Have patience. If you do the right thing and try to handle credit in a new, more responsible way, in time you should recover.