Purchasing a Home After a Bankruptcy Filing
If you want to buy a home after bankruptcy, there are just a few things to consider. Generally, two years must pass since the discharge date of your bankruptcy filing before you can qualify for an FHA mortgage loan.
You can usually prove that this time has lapsed by providing the mortgage company with a credit report. However, if the credit report does not verify the discharge date—or if additional documentation is necessary to determine if any liabilities were discharged in the bankruptcy—you’ll need to provide the mortgage lender with the bankruptcy and discharge documents.
Chapter 7 “liquidation” bankruptcy DOES NOT disqualify you from obtaining an FHA-insured mortgage if, at the time of case number assignment, at least two years have elapsed since the date of the bankruptcy discharge. During this time, you must have re-established good credit or chosen not to incur new credit obligations.
An elapsed period of less than two years (but not less than 12 months) may be acceptable if:
- You show that the bankruptcy was caused by extenuating circumstances beyond your control; and
- You have exhibited a documented ability to manage your financial affairs in a responsible manner.
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Purchasing a home and navigating the bankruptcy filing process can be challenging. It often involves multiple statutes, rules, and procedures—but, with the right legal help, it is possible. The process will be much easier if you consult our team at Holston & Huntley. We provide trustworthy and prudent legal advice, prioritizing your interests every step of the way.