VA Loans After Bankruptcy Kentucky With No Lender Overlays

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will cover and discuss qualifying for VA loans after bankruptcy Kentucky with a VA Lender with no lender overlays. The state of Kentucky has one of the highest concentrations of veterans. Both active and retired members of the U.S. Armed Forces make Kentucky their home. Kentucky is also one of the hardest-hit areas during the Great Depression of 2008. As a result, many veterans in many states like Kentucky, Mississippi, Georgia, Pennsylvania, District of Columbia went through financial hardship where they filed for bankruptcy or had a housing event such as foreclosure, deed in lieu, or short sale. Veteran Home Buyers with Certificate of Eligibility (COE) can now qualify for VA loans after Chapter 7 and Chapter 13 Bankruptcy with Gustan Cho Associates. Gustan Cho Associates Mortgage has no overlays on VA loans after Bankruptcy for veteran borrowers in Kentucky.

How Do Bankruptcies Protect Consumers?

How Do Bankruptcies Protect Consumers?

Bankruptcy is a federal law that has been created to help individuals and businesses.

There are two types of Bankruptcies:

  1. Chapter 7 Bankruptcy
  2. Chapter 13 Bankruptcy

Purpose Of Bankruptcies:

Bankruptcies offer to either wipe out their past debts and default judgments or restructure their existing debts into an affordable payment plan. Filing bankruptcy enables an individual or business financial relief from the courts to get a fresh financial start in life. Chapter 7 Bankruptcy wipes out all of the consumer’s debt. Chapter 13 Bankruptcy Repayment Plans enable the petitioner to pay a percentage of their monthly gross income to their creditors. With Chapter 13 Bankruptcy, after five years, whatever debts that are remaining will get discharged from the courts.

Benefits Of Bankruptcy Protection

Bankruptcy offers hard-working folks who have lost their jobs or businesses a fresh financial start in life where they are not hounded by creditors and bill collectors. There are millions of Americans who had to file bankruptcy after the Great Recession of 2008 and bankruptcy benefited them in getting a fresh start in life. People who have filed for bankruptcy can qualify for new credit and mortgage loans after a year or two after the bankruptcy discharge and some even have credit scores over 700 after filing bankruptcy. There are two types of bankruptcies for individuals:

  • Chapter 7 Bankruptcy
  • Chapter 13 Bankruptcy

Exempt Assets When Filing For Bankruptcy

With Chapter 7 Bankruptcies, all non-exempt assets are liquidated to pay off creditors. Most people who file Chapter 7 Bankruptcy do not have many assets and a lot of unsecured debts such as credit card bills, medical bills, and other debts and judgments. For consumers with multiple judgments, a Chapter 7 bankruptcy will wipe it all out and petitioners can have a new fresh debt-free financial start in life. Judgment creditors can no longer attach wage garnishments or freeze a bank account. All collection efforts from creditors come to an abrupt halt once a debtor files for bankruptcy protection.

Is Chapter 13 Bankruptcy The Best Choice in Qualifying for VA Loans After Bankruptcy Kentucky With Bad Credit?

Chapter 13 bankruptcy is for folks who have assets and income and want to protect their assets and reorganize or adjust their overall debt through a court-ordered payment plan over the course of several years. This type of bankruptcy is ideal for folks who had a drastic income reduction. It benefits consumers who own a home with equity and do not want to lose their home or other assets. All they need is a smaller overall monthly payment plan until they are able to catch up.

Pros and Cons in Filing Bankruptcy

Pros Of Filing Bankruptcy

The day bankruptcy petition is filed in Bankruptcy Court, petitioners are immediately protected from any collection activities from any creditor. The bankruptcy filing is an automatic stay from any collection activities which includes the following:

  • Collection calls
  • Collection letters
  • Threats from creditors of filing suit
  • Wage garnishments
  • Seizing any assets or freezing any assets such as bank accounts and investment accounts

What About Creditors in Qualifying For VA Loans After Bankruptcy Kentucky

Bankruptcy is a creditor’s worst nightmare. After 90 days of filing bankruptcy, unless there is fraud involved, the court will most likely discharge all debts where you do not have to repay any creditors. This is known as the discharge date of bankruptcy and it is the effective date when they are completely debt-free.

Cons of Filing Bankruptcy in Qualifying For VA Loans After Bankruptcy Kentucky

Bankruptcy will not relieve your student loans, back taxes, alimony, or child support. The minute bankruptcy is recorded on the credit report, credit scores will most likely drop 200 plus points. However, the drop in credit scores is temporary and credit scores will gradually improve as time passes. Consumers should get three secured credit cards as soon as possible after the discharge date of bankruptcy and start re-establishing credit.

VA Loans After Bankruptcy Kentucky: Is Bankruptcy My Best Option?

Those who have prior bad credit such as open collection accounts, charge offs, repossessions of cars, or other bad debt and it has been longer than three or more years and the debt collectors are leaving them alone may want to think twice about filing bankruptcy. As long as consumers have no judgments on record, most older unpaid debts can be wiped out due to the statute of limitations where they are no longer responsible.

Statute of Limitations on Bad Debts

Most credit card debts and bad debts have a five-year statute of limitations depending on which state they reside in or where the credit was issued. I am not a bankruptcy attorney but why stir things up and file bankruptcy when the creditors are leaving consumers alone. Home Buyers can qualify and get a mortgage loan approval with aged unpaid debts and open collection accounts.

VA Loans With 500 Credit Scores And Bad Credit

VA loans are very lenient with borrowers with prior bad credit and lower credit scores. There are no minimum credit score requirements to qualify for VA Loans in Kentucky. Borrowers can have credit scores as low as 500 FICO and get an approve/eligible per automated underwriting system. The key in getting an approve/eligible per AUS on VA loans with 500 credit scores is to have been timely on all payments in the past 12 months and have a high residual income. Borrowers with lower credit scores and high debt-to-income ratios should have high residual income, compensating factors, and reserves.

VA Loans After Bankruptcy Kentucky With High Debt To Income Ratio

There is no maximum debt to income ratio requirements to qualify for VA Loans. Gustan Cho Associates have helped thousands of borrowers with debt to income ratios exceeding 60%. The key to getting an approve/eligible per automated underwriting system on VA loans with high debt to income ratios is to have high residual income and reserves. GCA mortgage has approved and closed on many borrowers on VA loans with debt to income ratios exceeding 65%. However, these borrowers had sufficient residual income, reserves, compensating factors, and timely payments in the past 12 months.

VA Loans After Bankruptcy Kentucky: Chapter 7 Versus Chapter 13

Will bankruptcy solve your convictions?

If consumers still have creditors and collection agencies hounding them and are getting sued and have judgments, wage garnishments, and assets are frozen, bankruptcy might be the best option. Consumers with multiple judgments have the possibility of having judgment creditors aggressively pursuing in garnishment of wages and freezing the bank account. Judgments are the worst derogatory credit tradelines consumers can have.

How Long Are Judgments Good For?

Most judgments are good for 10 years and the creditors can renew them for ten more years more than once. I strongly recommend seeking the advice of a reputable bankruptcy attorney. When consumers go meet a bankruptcy attorney, take a copy of the credit report to review the credit report with their attorney. Homebuyers can qualify for mortgages after bankruptcy after meeting the mandatory waiting period requirements. Gustan Cho Associates has non-QM mortgages one day out of bankruptcy and foreclosure.

Qualifying For VA Loans After Chapter 7 Bankruptcy In Kentucky

Veteran homebuyers in Kentucky can qualify for VA Loans after Chapter 7 Bankruptcy. The requirements to qualify for VA loans After Chapter Bankruptcy 7 Bankruptcy require a mandatory waiting period after the discharge date. Veteran Borrowers can qualify for VA loans After Chapter 7 Bankruptcy in Kentucky after two years from a Chapter 7 Bankruptcy Discharge Date.

How Can You Qualify For VA Loans Kentucky After Chapter 13 Bankruptcy

Just waiting out the mandatory waiting period does not automatically qualify you to qualify for a VA loan in Kentucky. Lenders expect timely payments after bankruptcy. You need re-built and re-established credit after bankruptcy. The easiest and fastest way to re-establish credit after bankruptcy is to get secured credit cards. The team at Gustan Cho Associates has helped countless borrowers achieve over 700 credit scores after bankruptcy. 

VA Loan Requirements In Kentucky During Chapter 13 Bankruptcy Repayment Plan

Borrowers can qualify for VA loans during Chapter 13 Bankruptcy without the bankruptcy being discharged. Veteran Home Buyers can qualify for VA Loans one year into a Chapter 13 Bankruptcy Repayment Plan with Trustee Approval. Most Bankruptcy Trustees will approve veteran home buyers get a VA Loan During Chapter 13 Bankruptcy. The file needs to be manually underwritten. VA manual underwriting guidelines apply. 

VA Loan Requirements In Kentucky After Chapter 13 Bankruptcy Discharged Date

There is no waiting period to qualify for VA Loans after the Chapter 13 Bankruptcy discharged date. If the bankruptcy discharged date has been seasoned less than two years, the file needs to be a manual underwrite. The borrower needs to have been timely on all of their monthly payments in the past two years and during the Chapter 13 repayment plan. Borrowers should have rebuilt and re-established credit. Non-traditional credit can be used versus traditional credit tradelines.

VA Loan Requirements In Kentucky After Foreclosure

VA loan requirements in Kentucky are more lenient than any other loan program. The waiting period after a housing event is shorter than other loan programs. There is a two-year waiting period to qualify for VA Loans after foreclosure, deed in lieu of foreclosure, short sale.

Qualifying For VA Loans In Kentucky With A Mortgage Company Licensed In Multiple States With No Lender Overlays

Gustan Cho Associates is a mortgage company licensed in multiple staes with no lender overlays on government and conventional loans. Borrowers who need to get qualified for government and conventional loans with a five-star mortgage company with no lender overlays, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays. We have helped thousands of borrowers in Tennessee close their VA loans with credit scores as low as 500 FICO. GCA Mortgage licensed in multiple states has a national reputation of not having any lender overlays on VA loans.