How Long After for Filing Bankruptcy Can You Purchase Another Home?

by Heather Frances J.D. Google
Bankruptcy filers can become homeowners in just a few years.

Bankruptcy filers can become homeowners in just a few years.

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Bankruptcy can hit a filer's credit score, often causing banks and other lenders to avoid lending money to someone who has been through bankruptcy. But it's not impossible to qualify for a mortgage again after filing bankruptcy. In fact, many filers can qualify for a mortgage again in one to four years after they receive their bankruptcy discharge.

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Chapter 7

In Chapter 7 bankruptcy, sometimes called liquidation bankruptcy, a court-appointed bankruptcy trustee sells the debtor's nonexempt assets to pay his debts, and most remaining debts are wiped out with a discharge. Debtors who file a Chapter 7 bankruptcy generally must wait four years after this discharge is granted to obtain a conventional mortgage loan -- that is, a loan not backed by the government. Debtors must wait two years to get a government-backed loan, such as an FHA loan, or as little as one year if they can demonstrate extenuating circumstances beyond their control.

Chapter 13

In a Chapter 13 bankruptcy, the debtor must complete a plan to repay debts over three or five years to receive his bankruptcy discharge. A Chapter 13 debtor can get a new conventional mortgage as little as two years after discharge, and he may get a new FHA loan even while he is in his repayment period, as long as at least a year has passed since filing and he is complying with the repayment plan.