DETROIT – Have you ever filed for bankruptcy? If this is the case, it may seem as if you’ll never be able to get back on your feet financially. The truth is, bankruptcy does not leave a permanent note on your credit report. If you know what procedures to take, you can even buy a property after bankruptcy.

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How Long After Bankruptcy Can You Buy A House?

You’ll have to wait until your bankruptcy is discharged – or dismissed if it doesn’t fulfill the conditions – before you can acquire a loan. But exactly how long do you need to wait? The answer is contingent on the sort of bankruptcy you have and the type of loan you seek.

Chapter 7

Chapter 7 bankruptcy is the most prevalent type of bankruptcy. A judge takes away your qualified debts via a Chapter 7 bankruptcy. Unfortunately, your credit will suffer as well. To qualify for a conventional loan following a Chapter 7 bankruptcy, you must wait at least 4 years after the court discharges or dismisses your bankruptcy. Mortgage loans sponsored by the government are a little more forgiving. To acquire a United States Department of Agriculture (USDA) loan, you must wait three years after your bankruptcy has been dismissed or discharged. You only need to wait two years after your release or dismissal to apply for a Federal Housing Administration (FHA) or Department of Veterans Affairs (VA) loan.

Chapter 13

The consequences of a Chapter 13 bankruptcy in Illinois for example, are less severe than those of a Chapter 7. Rather to eliminate debt, Chapter 13 involves reorganizing your debts. This may necessitate making regular payments to your creditors. Chapter 13 bankruptcy also has a lower impact on your credit score and allows you to maintain your assets. The period of time you must wait to apply for a conventional loan after a Chapter 13 bankruptcy is determined by the court’s decision. If your bankruptcy is dismissed by the court, you must wait at least four years before applying again.

If your bankruptcy is discharged by a court, post-bankruptcy borrowers must wait four years from the date of filing and two years from the date of dismissal before applying for a conventional mortgage that fulfills Fannie Mae requirements. Government-backed loans have less stringent requirements than Chapter 7 bankruptcy. After a Chapter 13 bankruptcy, USDA loans need a one-year waiting period. Whether you are discharged or dismissed, you must wait the same amount of time. Before you apply for an FHA or VA loan, you must have your debt dismissed or discharged by a court.

This article was provided by Hannah Madison