Once a person’s bankruptcy is discharged, they often have additional questions about bankruptcy. At The Law Offices of Paul Y. Lee we are proud to work with our clients from beginning to end – and that does not necessarily stop the day the bankruptcy is discharged. Call us now for a free consultation at 951-755-1000. You can also read on to learn about what a bankruptcy client’s options are for buying a home after a bankruptcy.
FHA Loans
Federal Housing Authority loans, better known as FHA loans, have different requirements for a person who has filed Chapter 7 versus Chapter 13. For a person who has had their Chapter 7 bankruptcy discharged, there is then a two-year waiting period before they will be eligible for an FHA loan. If the person wants a non-FHA loan, they may have to wait three or even more years, depending on the requirements of the specific bank to which you are applying.
For a person who chose Chapter 13, it may be easier to secure an FHA mortgage. This is due to the fact that this type of bankruptcy involves a reorganization plan in which debt is reduced eventually forgiven, but payments must be made. If the Chapter 13 is successfully completed, an FHA loan could be possible within one year of the discharge. This is due to the goodwill the debtor has earned by repaying their debts.
Conventional Loans
Fannie Mae, Freddie Mac, and other entitles affiliated with the government have strict guidelines for giving out loans to people who have filed for bankruptcy. In most cases, a person who has a Chapter 7 bankruptcy discharged will be eligible after four years, but in certain circumstances it could be as short as two years. The waiting period is two years for Chapter 13 filings.
VA Loans
Loans from the Veterans Administration (VA) are generally easier to get than conventional loans, assuming the borrower is a veteran. A person who files for Chapter 7 could be eligible for a VA loan just two years after the discharge. However, there are additional requirements, such as explaining the reason for the bankruptcy and the plan to rebuild credit.
For a Chapter 13 bankruptcy, at least one year of payments must have been paid on time, and the bankruptcy court must approve the VA loan.
The Right Bankruptcy Attorney Will Help You Find the Best Options
If you are working with a bankruptcy attorney then you will have access to a wealth of helpful information that applies directly to your case. If you are considering filing for bankruptcy in California then we strongly suggest you contact The Law Offices of Paul Y. Lee at 951-755-1000 right away. We will begin with a free bankruptcy consultation during which we can assess your situation and offer insight into your options. Call now to get started right away.
