Getting Approved For VA Loans After Bankruptcy District Of Columbia

This BLOG On Getting Approved For VA Loans After Bankruptcy District Of Columbia Was UPDATED On January 19th, 2018

Washington, D.C. has one of the highest concentration of veterans.

  • Both active and retired members of the U.S. Armed Forces make the District of Columbia their homes
  • Washington, D.C. is also one of the hardest hit areas during the Great Depression of 2008
  • As a result, many veterans in District of Columbia went through financial hardship where they filed bankruptcy or had a housing event such as foreclosure, deed in lieu, short sale
  • Veteran Home Buyers with Certificate of Eligibility (COE) can now qualify for VA Loans after Chapter 7 and Chapter 13 Bankruptcy with The Gustan Cho Team at USA Mortgage

The Gustan Cho Team at USA Mortgage has no mortgage overlays on VA Loans After Bankruptcy for Veteran Borrowers in District Of Columbia.

How Does 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 offers to either wipe out their past debts and default judgments or restructure their existing debts into an affordable payment plan
  • Bankruptcies enables individual or business financial relief from the courts to get a fresh financial start in life
  • Chapter 7 Bankruptcy wipes out all of the consumers debt
  • Chapter 13 Bankruptcy Repayment Plans enables the petitioner to pay a percentage of their monthly gross income to their creditors
  • 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 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
  • With Chapter 7 Bankruptcies, all non exempt assets are liquidated to pay off creditors
  • Most people who file Chapter 7 Bankruptcy do not have much assets and a lot of unsecured debts such as credit card bills, medical bills, and other debts and judgments
  • 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 bank account
  • All collection efforts from creditors come to an abrupt halt once a debtor files for bankruptcy protection

Is Chapter 13 Bankruptcy Right For You?

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 and own a home with equity and do not want to lose their home or other assets and all they need is a smaller overall monthly payment plan until they are able to catch up

Pros Of Filing Bankruptcy And Is Bankruptcy Right For You?

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
  • Bankruptcy is a creditors 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 where they are completely debt free

Cons Of Filing Bankruptcy And Is Bankruptcy Right For You?

Bankruptcy will not relieve your student loans, back taxes, alimony, or child support.

  • The minute bankruptcy is recorded on credit report, credit scores will most likely drop 200 plus points
  • However, the drop of 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

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, they 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 statute of limitations where they are no longer responsible
  • 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

Bankruptcy Will Solve Judgments

However, if consumers still have creditors and collection agencies hounding them and are getting sued and have judgments, wage garnishments, and assets 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 bank account
  • I strongly recommend to seek the advice of a reputable bankruptcy attorney
  • When consumers go meet bankruptcy attorney, take copy of credit report to review the credit report with their attorney

Qualifying For VA Loans After Bankruptcy

Veteran Home Buyers in Washington, D.C. can qualify for VA Loans after Bankruptcy.

Here are the requirements to qualify for VA Loans After Bankruptcy And Foreclosure:

  • Veteran Borrowers can qualify for VA Loans After Chapter 7 Bankruptcy after two years from a Chapter 7 Bankruptcy Discharge Date
  • 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
  • There is no waiting period to qualify for VA Loans after Chapter 13 Bankruptcy discharge date
  • There is a two year waiting period to qualify for VA Loans after foreclosure, deed in lieu of foreclosure, short sale
  • There are no minimum credit score requirements to qualify for VA Loans
  • There is no maximum debt to income ratio requirements to qualify for VA Loans

The Gustan Cho Team at USA Mortgage are direct lenders with no mortgage overlays on government and conventional loans. Borrowers who need to get qualified for government and conventional loans with a direct lender with no overlays, please contact us at The Gustan Cho Team at USA Mortgage at 262-716-8151 or email us at gcho@usa-mortgage.com.

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.

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