Will I be able to get a home mortgage if I file bankruptcy in Oklahoma?

Many of my bankruptcy clients ask me this question because they are concerned that they will never be able to qualify for a home mortgage if they have a bankruptcy on their credit report.  My general answer is that while I don’t have a crystal ball and can’t predict the future, my experience has been that a bankruptcy in and of itself generally does not prevent a person from being able to get a home mortgage in the future. However, a person usually needs to establish a good track record of timely payments on all of their bills for at least a two-year period after filing bankruptcy before applying for a home mortgage.

I have many friends who are realtors and mortgage brokers and here’s what they tell me. When a lender is considering a mortgage applicant who has a bankruptcy on his or her credit report, the bankruptcy certainly is a negative factor to be considered but generally is not an insurmountable problem. In fact, it is common for lenders to consider a person who filed bankruptcy to be a better credit risk after the bankruptcy than before. How can that be?

Well usually this is because the bankruptcy isn’t the only negative mark on that person’s credit report. Chances are good that prior to the bankruptcy, the person was up to their eyeballs in debt with a history of late payments and charge offs, and maybe even wage garnishments and repossessions. If so, that person’s credit was already shot and a mortgage lender wouldn’t touch them with a ten-foot pole. But after filing bankruptcy, things change dramatically. Why is this?

Well, for a couple of reasons. First, where before the bankruptcy the person was drowning in debt, after the bankruptcy most if not all of that debt has been wiped out and is no longer owed.  Therefore as long as the person has a steady source of income, he or she is likely to have no problem making a mortgage payment. And second,  the mortgage lender feels pretty safe since the person has just filed bankruptcy and won’t be able to file again in the near future without consequences.

So don’t believe it when you hear that you will never be able to get a home loan after you file bankruptcy. It’s simply not true.

If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.