HOW LONG WILL I HAVE TO WAIT TO BUY A NEW HOME AFTER FILING A CHAPTER 7?

So you were in foreclosure, filed for Chapter 7 Bankruptcy and you’re done. WRONG!

If you plan on buying another home in the future after a regular Chapter 7 bankruptcy, the seasoning clock begins when the action is discharged. From that point, you’re typically looking at a four-year wait for conventional loans and a two-year wait for either FHA or VA financing.

However, Things can get murkier when bankruptcy and foreclosure mix. It’s not uncommon for homeowners to go through bankruptcy and only see their homes foreclosed on months or even years later. That means that even though you are not personally liable for the mortgage after a Chapter 7, however you still own the home until the bank completes the foreclosure. If you go to buy a new home, many banks require that the seasoning period starts only from the date you no longer own the deed to the last home.

How lenders view this can depend on their guidelines and the type of home loan you’re seeking. The way to insure that you meet the seasoning requirements is to complete a short sale immediately after the bankruptcy thereby assuring that the home is out of your name and the banks debt is settled. This way you can insure that the seasoning period starts right away.