Written by attorney Mohammed Omar Badwan

Can I Buy A House During a Chapter 13 Bankruptcy?

Most debtors will be in a Chapter 13 bankruptcy for 3-5 years depending on their income when they filed the case. A question many clients ask is whether they are able to buy a home during a Chapter 13 bankruptcy. The answer is yes. Although bankruptcy does negatively affect your credit score, it is not a person's financial "death". Debtors in a Chapter 13 are repaying some debts and creditors may consider it more favorable than a Chapter 7 filing. Obtaining a mortgage during a Chapter 13 bankruptcy is very possible. FHA insured loans require that a person in Chapter 13 have completed one year of payments AND obtain a letter from Chapter 13 Trustee stating the amount the applicant can borrow. Keep in mind, making timely Chapter 13 payments will increase your credit score as it displays finanical responsiblity on behalf of the debtor. "Bankruptcy friendly" lenders do exist, it is just a matter of being a smart borrower and shopping for the best rate.

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