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How difficult will it be to get a home loan after filing bankruptcy?

Irwindale, CA |

Two years ago we(myself and my wife) had a financial emergency that caused us to gain a large amount of debt we fell behind on our house payments. We filed for chapter 13 bankruptcy in order to keep the house. We then took on the house payment and an additional payment to the court for the amount we fell behind. We had another family emergency and fell behind on the house payments again, while staying current on the court payments. The bank now is looking to remove the chap 13 agreement and foreclose the house. The house payments at this point are outrageous and are not close to the house's worth so we decided to file chapter 7 bankruptcy. After filing bankruptcy how difficult would it be to get a home loan. In addition can we file ch 7 after already filing ch 13 and get away from the debt

We have already caught up and payed all debt except the house and can afford to make house payments now but the mortgage is upside down and we decided that making payments twice the value of the house was not in our best interest. We also still have not fully payed the outstanding amount on the chapter 13 agreement. Some

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Attorney answers 4


It's probably not possible to give you a meaningful response without knowing your entire financial picture. However, one possibility with regard to purchasing a new home is to look for properties with seller financing (also known as an owner carry back). If the seller is willing to loan to you, you will not have to go through the same standards that a traditional financial institution would require.

Frank W. Chen is licensed to practice law in the State of California. The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult your own attorney.


To answer your question would require speculation that really approaches the level of what I refer to as "fortune telling."

After your bankruptcy, how will your life change? Will you continue to have financial emergencies that prevent you from paying your living expenses on time? Will you actively take steps to rebuild your credit?

If things continue the way they have, I doubt you will every qualify for another mortgage. But people who do learn from the bankruptcy experience and through a combination of hard work, education & good luck are able to find lenders to finance the purchase of a home within a year after completing a bankruptcy.

Hope this perspective helps!


You can convert your chapter 13 to a chapter 7 and surrender the house. You should discuss the ramifications of this with your attorney to identify potential issues.


In my experience I have found most of the major lenders to have a 2-yr policy. If you have a clean payment/credit history for at least 2 yrs after a Ch 7 discharge, and have sufficient income to be able to afford the loan payments, then you stand a good chance of getting the mortgage loan. Some smaller lenders may be OK with a loan after a year, but most will want to see how you handle your debts for at least the 1-2 yrs. Of course they will still hit you with a higher interest rate then you would get without the BK on your record, but at least you would get the financing.