After people have filed for bankruptcy, they many times will have questions about their financial future after their bankruptcy is complete. While the filing of bankruptcy does have a negative impact on your credit score initially when you file, all of the negative reporting of late payments, along with non-payments, will stop.
For some clients, they have found that they have to wait about one year before getting a new credit card or other type of credit. However, for many clients, they are able to obtain credit immediately after the bankruptcy, because the credit card companies know that the person cannot file for bankruptcy again for a number of years. After bankruptcy, you certainly would not want to begin incurring debt right away, but there are some small steps you can take to start rebuilding your credit again.
One of the bigger questions we receive are regarding the purchase of a home after filing for bankruptcy. Lenders will allow someone to purchase a home after bankruptcy, and below are the general guidelines for doing so, although lenders can vary:
If you filed Chapter 7 Bankruptcy:
You have to wait 2 years from your discharge for a FHA or VA loan;
You have to wait 3 years from your discharge for a USDA loan; and
You have to wait 4 years from your discharge for a Fannie Mae or Freddie Mac loan
If you filed Chapter 13 Bankruptcy:
With FHA, USDA, or VA loans, you can purchase a home during your Chapter 13 bankruptcy, after one year’s worth of plan payments and must obtain court approval; and
With Fannie Mae or Freddie Mac loans, you can purchase a home 2 years after discharge of your Chapter 13 plan.
If you are contemplating filing for bankruptcy, or have questions about the process, please feel free to contact our office at (206) 408-8158 or visit us online at www.dallawfirm.com.
[caption id="attachment_100549" align="aligncenter" width="490"] Darcel Lobo[/caption]