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CHICO BANKRUPTCY ATTORNEY
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bankruptcy lawyerChico Bankruptcy Attorney
August Bullock
530-961-3182

2260 St. George Lane #1, Chico CA 95926

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home mortgage

CAN I GET A MORTGAGE AFTER FILING BANKRUPTCY?

Generally yes, but how long it will take depends on a variety of factors.

First, you should do your best to restore your credit by following the suggestions in my other blog  How Will Bankruptcy Affect My Credit, And What Can I Do About It?

Second, you will have to wait a minimal amount of time before the lenders will consider your application.  All lenders have their own criteria, but here are some general guidelines:

If you filed a chapter 7, the waiting period for a conventional loan  is usually four years after discharge. For an FHA or VA loan, the waiting period is only two years after discharge.
(A discharge in a chapter 7 usually occurs three or four months after you file.)

You might be able to qualify for a shorter time period if you can show that the bankruptcy was due to circumstances beyond your control.

If you filed a chapter 13 reorganization, you might qualify for a conventional loan while you are still in the case, before you get your discharge, only  one year after the bankruptcy is filed. FHA and VA loans are even more lenient. You will have to show that you stayed current on the loan while you  were in the chapter 13. It is advisable to make the payments early every month. Sometimes it takes the Trustee and the lender additional time to process your payment, and you don't want to be late.

Here is a recap of these bankruptcy waiting periods:

Chapter 7, conventional mortgage four years from discharge.
Chapter 7, FHA or VHA: two years from discharge.

Chapter 13, conventional mortgage: one year from filing.
Chapter 13, FHA or VHA: even more lenient.

What about foreclosures, short sales, and deeds-in-lieu? (A "deed-in-lieu" occurs when you voluntarily give the property back to the lender to avoid a foreclosure.)

These generally require you to wait longer time periods.

Generally you will have to wait seven years after a foreclosure for a conventional loan. This may be reduced to three years IF you can show it was due to circumstances beyond your control.

You will have to wait four years after a short sale or deed-in-lieu for a conventional loan.

You will have to wait three years after a foreclosure or short sale for a FHA loan.

You may only have to wait two years after a foreclosure for a VA loan.

Here is a recap of these non-bankruptcy waiting periods:

Foreclosure, conventional: seven years
Foreclosure, FHA: three years
Foreclosure, VA two years

Short sale or deed-in-lieu, conventional: four years
Short sale or deed-in-lieu, FHA: three years
Short sale or deed-in-lieu: VA: possibly no wait

Note that if your foreclosure wound up on a federal data base tracking defaults on federal debt, you might have to wait three years.

What if there is a bankruptcy and a foreclosure?
Usually the bankruptcy trumps the foreclosure, because the debt is legally wiped out in the bankruptcy. Therefore, you have to wait a shorter time than if you didn't file bankruptcy. You will need to check with each lender, though, to see how they handle these situations.