Qualifying For Mortgages After Bankruptcy

This BLOG On Qualifying For Mortgages After Bankruptcy Was Written By Chicago Bankruptcy Attorney Chad Hayward & Julie Hayward, Managing Broker And President Of EDGE REALTY LLC

Chad Hayward And Julie Hayward Are Preferred Partners Of Gustan Cho NMLS 873293 Of The Gustan Cho Team at CrossCountry Mortgage NMLS 3029

When you file bankruptcy and you are a homeowner, your mortgage company as part of your bankruptcy process will be getting paperwork of your bankruptcy from the U.S. Bankruptcy Courts.

There Two Types Of Bankruptcies

  • Chapter 7 Bankruptcy : A Chapter 7 Bankruptcy is called total liquidation where it applies for consumers who have a lot of unsecured debt and little to no income.
  • There is a maximum annual income limit for you to meet in order to qualify for a Chapter 7 Bankruptcy .
  • Chapter 13 Bankruptcy Repayment Plan : In order to qualify for a Chapter 13 Bankruptcy, you need to be employed with a stable income because a percentage of your income is deducted and allocated to pay your creditors for a certain period.
  • Most Chapter 13 Bankruptcy Plans are for 60 months or 5 years. 
  • After the Chapter 13 Bankruptcy Repayment Period is over, the remaining unpaid debts that you owe is discharged on the Chapter 13 Bankruptcy and you are no longer liable for the balance.

How Can I Qualify For Mortgages After Bankruptcy?

Mortgage Borrowers Can Qualify For Mortgages After Bankruptcy

  • However, there are mandatory waiting periods to be eligible to qualify for government and Conventional Loans.  
  • FHA, VA Loans, and Conventional mortgages after bankruptcy require mandatory waiting period requirements after both types of bankruptcies.
  • The Gustan Cho Team at CrossCountry Mortgage Inc. NMLS 3029 offers NON-QM Loans where borrowers can qualify for NON-QM Loans one day out of bankruptcy, short sale, foreclosure, and deed in lieu of foreclosure.

Here are the waiting period requirements to qualify for mortgages after bankruptcy for FHA, VA, and Conventional Loan:

How Can I Qualify For FHA Insured Mortgages After Bankruptcy?

  • Home buyers can qualify for mortgages after bankruptcy in two years after a Chapter 7 Bankruptcy discharged date.
  • Minimum Credit Scores Required is 580 FICO 
  • No late payments history after the discharged date of the Chapter 7 Bankruptcy.
  • Re-Established Credit After Chapter 7 Bankruptcy discharged date.

How Can I Qualify For Conventional Mortgages After Chapter 7 Bankruptcy?

  • Home Buyers can qualify for Conventional Mortgages after bankruptcy?
  • Home Buyers can qualify for Conventional Mortgage after bankruptcy in four years after the Chapter 7 Bankruptcy discharged date.
  • Minimum credit scores required to qualify for Conventional Loans is 620 FICO.
  • No Late Payments after Chapter 7 Bankruptcy discharged date.
  • Maximum Debt To Income Ratio allowed with Fannie Mae is 45% DTI.
  • Freddie Mac has a maximum debt to income ratio cap of 50% DTI.

Qualifying For VA Mortgages After Bankruptcy

  • Home Buyers can qualify for VA Mortgages After Bankruptcy two years after Chapter 7 Bankruptcy discharged date.
  • Veteran Home Buyers need to have re-established credit after Chapter 7 Bankruptcy discharged date.
  • No late payments after discharged date of Chapter 7 to qualify for mortgages after bankruptcy with VA Loan.
  • The Gustan Cho Team at CrossCountry Mortgage Inc. NMLS 3029 have no overlays on VA Loans but does require a 580 FICO Credit Score.

How Can I Qualify For Mortgages After Bankruptcy?  Chapter 13 Bankruptcy

  • Home buyers can qualify for mortgage during Chapter 13 Bankruptcy bankruptcy one year into a Chapter 13 Bankruptcy Repayment Plan with the approval of their Chapter 13 Bankruptcy Trustee.
  • There are no waiting period after a Chapter 13 Bankruptcy discharged date to qualify for mortgages after bankruptcy.
  • The Gustan Cho Team at CrossCountry Mortgage NMLS 3029 is a five star national 5 star Fannie Mae, Freddie Mac, Ginnie Mae Direct Lender with no overlays on government and conventional loans and licensed in 50 states.
  • All Chapter 13 Mortgages After Bankruptcy and During Bankruptcy are Manual Underwriting.
  • CrossCountry Mortgage NMLS 3029 is known nationally for closing loans in 21 days.

Bankruptcy Process

Bankruptcies are great tools for consumers to use to get out of debt and get a fresh financial start. A bankruptcy will temporarily drop your credit scores but your credit will boost back up in a rather short period of time by re-establishing your credit. There are many ways of re-establishing your credit. Adding positive credit such as getting secured credit cards is the easiest and fastest way of re-establishing your credit.

Below Is A General Scope Of The Typical General Bankruptcy Process

  • Your bankruptcy attorney will guide you during your bankruptcy process if it is recommended to contact all or some of your creditors in the event if your intentions is preventing your eviction by the country sheriff’s department or in the event if creditors are trying to do a wage garnishment from your employer or go after your assets, especially bank accounts.
  • Other situations that you may need to resolve by contacting your creditors is if your auto has been repossessed and need to get it back or in the event if you need to get your driver’s license due to suspension of not paying fines.
  • There are many instances when urgency is not necessary due to the fact that an automatic stay will resolve this and any other potential actions. in cases when properties are planned on being started for a foreclosure process or in the event if an entry of judgment such in cases of lawsuits which has been initiated after the filing of your bankruptcy.
  • Many bankruptcy attorneys has halted foreclosures during the foreclosure process due to the consumer filing bankruptcy or just prior to the start of the foreclosure process.
  • The are many circumstances when the foreclosure starts and progresses due to not giving enough time for notice, the sale of the property is reversed and judgments against the debtor are reversed and/or vacated.
  • Do not stress out about you filing bankruptcy.  Bankruptcy is a federal law that protects consumers drowning in debt and gives them another chance to a fresh financial start in life and you can definitely qualify for mortgages after bankruptcy.

How Do Creditors Get Alerted Of A Consumer’s Bankruptcy?

When a consumer files for bankruptcy, they are required to name a list of all creditors on their bankruptcy petition.

Here Is Some Bullet Points On How Creditors Get Alerted Of A Consumer’s Bankruptcy

  • The bankruptcy attorney will be required to name and list all the creditors who have or may have claims on the consumer filing bankruptcy.
  • There are many cases where the bankruptcy attorney will be required to name and list of debtors such as the U.S. Internal Revenue Service, the county in the event if there are potential real estate property tax issues, utilities such as the water and sewer department where the property is responsible for their services, and/or governmental agencies to get information on possible fines owed by the consumer such as parking tickets, traffic tickets, building code violations, and/or other debts owed to the municipality.
  • After the list of all of the consumer’s creditors has been gathered and compiled and stated on your bankruptcy petition, your bankruptcy will be filed by your bankruptcy attorney.
  • Your bankruptcy petition will send out notice to the list of your creditors via email and/or mail.
  • The bankruptcy attorney normally doesn’t send out your bankruptcy filing notice to all of your creditors.
  • In the event and/or case where one or more creditor has not been included in the original initial bankruptcy filing, your bankruptcy lawyer will need to do an amendment to hour schedules.
  • Your bankruptcy attorney will then mail this change of circumstances and the addition of creditor and/or creditors to the creditors in question.
  • The Bankruptcy Courts charges a fee for this service of amending your bankruptcy petition to add creditors that were not initially included in the original initial bankruptcy petition.

Are Consumers Responsible For Debts That Were Not Listed On Chapter 7 Bankruptcy?

Consumers Are Required To Name And List All Their Creditors On Their Bankruptcy Petition

  • However, the Bankruptcy Process is a stressful process and the bankruptcy petitioner may not have all of their paperwork in order and may not remember to list all of their creditors.
  • There are many instances where the bankruptcy petitioner may forget to list one or more of the debts they owe to creditors, therefore, not list the creditor or creditors.

Here How Omission Of Creditors Work During Bankruptcy Process

  • Omitting creditors on bankruptcy petition happens
  • Omitting creditors on bankruptcy petitions does not mean that the bankruptcy petitioner is liable for the debts of the creditor he or she did not list as a creditor on their bankruptcy petition
  • Omitting creditors on bankruptcy petition does not mean that the creditor’s debts cannot be discharged
  • The probability of creditors and debts not listed and omitted on bankruptcy petition being discharged is very good
  • Creditors and Debts that are normally not discharged due to the debtor omitting the debt and creditor on their bankruptcy petition are the various types of debts that do not fall into dischargeable credits and debts
  • Examples of creditors and debts that cannot be discharged in a bankruptcy includes federal student loan debts, income taxes, child support and alimony payments, international torts, debts incurred due to fraud committed by the debtor, government fines, international torts
  • These types of debts can sometimes become complicated due to the fact that there are cases where non-dischargeable creditors must file an objection to discharge or a special complaint to determine whether or not if their debts are non-dischargeable under the laws of U.S. Bankruptcy Code.
  • Examples of case scenarios on the above situations happens on cases where creditors file a case reports on international torts such as cases of battery, false imprisonment, assault, and other similar cases.
  • Omitting debts of this type from the petition of your bankruptcy filing may result in the outcome of your debt not being able to be discharged from your bankruptcy and you still being liable for the liability.
  • On cases where the creditor that was omitted from your bankruptcy petition was a revolving credit card company that did not include cash advances initiated and transacted by you and/or extravagant luxury credit card purchase transactions just prior to you filing bankruptcy (cases like these may be deemed potential fraud ) then the chances of it being discharged with your bankruptcy is very likely even though it was not listed and claimed on your bankruptcy petition and no formal notice was mailed/sent or not to the creditor.
  • In the event if the debt that you owe your creditor is classified under an international tort classification and/or category, you need to have to have your bankruptcy petition amended and send official notice of the bankruptcy filing/amendment to the creditor in the event the creditor is aware that you are filing for bankruptcy and whether or not the creditor wants to claim an objection to the discharge of the debts that you owe the creditors.

How Soon Can I Re-Establish My Credit And Qualify For Mortgages After Bankruptcy

Many consumers believe that a bankruptcy will ruin their credit and will have a rather difficult time getting credit after bankruptcy. There are many folks who still believe that it is next to impossible to get mortgages after bankruptcy. This is not the case and you can qualify for mortgages after bankruptcy rather easily and as soon as two years. People who filed Chapter 13 Bankruptcy can qualify for FHA mortgages after bankruptcy one year into the Chapter 13 Bankruptcy Repayment Plan with Trustee approval and as long as they have been timely on their payments for the preceding 12 months. The Gustan Cho Team at CrossCountry Mortgage offers the following:

  • FHA Loans with no overlays
  • Home Buyers can qualify for FHA Mortgages After Bankruptcy one year after filing Chapter 13 Bankruptcy
  • No waiting period after Chapter 13 Bankruptcy discharged date
  • FHA Mortgages 2 years after a Chapter 13 Bankruptcy discharge date
  • Conventional Mortgages After Bankruptcy 4 years after Chapter 7 Bankruptcy discharge date
  • Conventional Mortgages After Bankruptcy 2 years after Chapter 13 Bankruptcy discharge date
  • VA Loans with no overlays
  • VA Mortgages After Bankruptcy after 2 years of discharge date
  • VA Mortgages After Bankruptcy after 2 years after foreclosure, deed in lieu of foreclosure, short sale
  • USDA Mortgages with no overlays
  • NON-QM Loans one day after bankruptcy and/or foreclosure
  • CrossCountry Mortgage NMLS 3029 is a FANNIE MAE, FREDDIE MAC, GINNIE MAE Direct Lender licensed in 50 states
  • CrossCountry Mortgage NMLS 3029 business platform and mission is to close loans in 21 days

Like to thank Chicago Bankruptcy and Real Estate Attorney Chad M. Hayward, managing director and chief legal officer of The Chad M. Hayward Law Offices and Julie Hayward, President and Managing Broker of EDGE REALTY LLC for being co-authors of this article on How Can I Qualify For Mortgages After Bankruptcy and being the preferred recommended partners of The Gustan Cho Team at CrossCountry Mortgage Inc. NMLS 3029.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

2 Comments

  1. Gustan Cho says:

    Chad Hayward of Hayward Law Offices is one of the fastest growing law firms in the Chicagoland Area specializing in Bankuptcies and Real Estate. Julie Hayward, Chad Hayward wife is the Managing Broker and President of EDGE REALTY LLC a top producing full service real estate brokerage firm based in Chicago and Suburbs with a five star reputation for its spectacular customer service and support for not just home buyers and sellers but for loan officers and other real estate industry professionals seeking expert advice on all types of real estate related matters.

    Gustan Cho NMLS 873293
    The Gustan Cho Team at CrossCountry Mortgage Inc NMLS 3029
    Area Manager

  2. Gustan Cho says:

    I like to congratulate Bob Vogel NMLS 873293 of The Gustan Cho Team at CrossCountry Mortgage Inc NMLS 3029 for being named Editor in Chief of California-Loans Mortgage & Real Estate Information Resource Center. Bob Vogel of CrossCountry Mortgage Inc NMLS 3029 is taking on the role of Editor In Chief of California-Loan Mortgage Information Resource Center although he is still Editor In Chief of Loan Consultants Mortgage & Real Estate Information Resource Center as well as an Associate Staff writer for Gustan Cho Associates Mortgage & Real Estate Information Resource Center.

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