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Buying a home after bankruptcy or foreclosure

When Arizona residents file for bankruptcy to wipe out most of their debts, intending to restart their financial lives, they may want to start their journey in a new house. Debtors may be unsure of whether they can get a loan to buy a house, and even if they can, how long will they have to wait to get it. The good news is that consumers may be able to get a loan a few years after filing for bankruptcy, and even after foreclosure proceedings are completed.

After an action is discharged in personal bankruptcy, either Chapter 7 or Chapter 13, Arizona residents may not have to wait very long to be approved for a loan. For Chapter 7, people usually have to wait either four years for a conventional loan or two years for either Federal Housing Administration (FHA) or Department of Veterans Affairs (VA) financing. Those who went through Chapter 13 bankruptcy may be approved for a conventional loan within two years, and the rules for FHA and VA financing are even more lenient, allowing the individual to seek financing within just a year of filing for bankruptcy.

Those whose houses were foreclosed upon may see a longer wait though, depending on the type of loan being sought. Conventional loans take longer, but an FHA loan can be pursued three years after they are out of foreclosure.

When an Arizona resident goes through bankruptcy and foreclosure together, things might get a little more complicated. Both waiting periods are not added to one another, but it is possible that the waiting time may be longer than that experienced in only one of these conditions.

Going through bankruptcy can be an emotional time for those involved, but rest assured there is light at the end of the tunnel. Once debt is discharged through bankruptcy proceedings, Arizona residents may have access to the same type of financing others do.

Source:, "How soon can I buy a house after bankruptcy or foreclosure?" Chris Birk, Oct. 17, 2014