Buying a Home After a Chapter 7 Bankruptcy Filing

Reader Question: How long will it take for me to be able to purchase a house after I file Chapter 7 bankruptcy?

I hate to fall back on this phrase so often, but ... it depends. Your credit score will obviously take a big hit if you file bankruptcy. But it's hard to say how long it will take to rebuild your score afterward, because there are so many variables involved.

I can tell you this much, though. From a mortgage lender's perspective, a Chapter 7 bankruptcy is worse than a Chapter 13 filing. These are the two most common forms of bankruptcy filed by individuals, but the difference in the debt repayment (or lack of it).

With a Chapter 7 filing, you are essentially walking away from your debts. This is the last thing a mortgage lender wants to see when considering you for a loan. With a Chapter 13 bankruptcy, on the other hand, the individual will typically repay the debt through a court-approved payment plan. So while they are both harmful to your credit score, at Chapter 13 filing at least shows that you made efforts to pay the debt.

Here are some related Q&A sessions you might want to peruse:

Improving Your Credit Score After Chapter 7 Bankruptcy
This person wanted to know how to improve a credit score after filing for Chapter 7 bankruptcy. The response I posted offers some tips that might someday be relevant to your situation. Here's another article on the same subject.

Buying a Home After a Chapter 13 Filing
This was basically the exact same question as yours, but from a person who filed Chapter 13 in 2005. As I mentioned in this response, only a mortgage lender can tell you when you're qualified for another home loan. So if you rebuilt your credit after bankruptcy and wanted to know your chances of getting a loan, you would have to apply for a loan at that time.

Buying a Home After a Bankruptcy Filing
Just another Q&A session on the same subject. This person did not specify the type, so my response covers both Chapter 7 and 13. I think by reading the three of these previous Q&A articles, you'll have a much better understanding of the big picture (i.e., the connection between bankruptcy, credit scores, mortgage loans, etc.).

I hope this answers your question. Good luck.