On Behalf of developers | January 12, 2021 | Chapter 7 Bankruptcy
Many people falsely assume that once they file for Chapter 7 bankruptcy protection, they can no longer purchase a home. While there are credit ramifications associated with filing for bankruptcy, doing so does not permanently disqualify Mississippi residents from home ownership.
In most cases, lenders require you to wait at least two years after filing for Chapter 7 bankruptcy before approving you for a mortgage. Since there are different mortgage programs, some of them carry different waiting periods:
It is important to note that the waiting period does not begin on the day that you file for Chapter 7 bankruptcy. Instead, the official waiting period to be approved for a mortgage begins on the day the court officially hands down your bankruptcy discharge. In most cases, the discharge comes four to six months after you file for bankruptcy protection.
As is the case in most situations, there are exceptions to the rules governing waiting periods. Some industry experts have pointed out that there are times when you can get approved for a mortgage within one year of receiving a bankruptcy discharge. If your bankruptcy was caused by extenuating circumstances and you have shown fiscal responsibility since then, you may be eligible for a mortgage within 12 months.
No matter where you are in the process of filing for Chapter 7 bankruptcy, you should work with an attorney who is familiar with your state’s specific bankruptcy laws. This attorney may help you fill out the forms that are a part of the process in addition to helping you understand whether you can apply for a mortgage before the two-year window has passed.