The protection from creditors that a personal bankruptcy offers often makes such an action the best option for those struggling with debt to get back to re-establishing themselves on firm financial ground. Yet those considering this option should understand that bankruptcy does repercussions.

The most obvious is the impact that personal bankruptcy has is to affect one’s credit rating. Per Experian.com, the record of a Chapter 7 bankruptcy remains on one’s personal credit report for 10 years, while the record of a Chapter 13 case remains for seven years. This prompts the question of how this affects one’s borrowing ability (specifically when seeking a home mortgage).

No set standard

Unfortunately, there is not an easy answer to that question as federal law has not set a standard in this area. Yet while there is no set standard when it comes to establishing a waiting period for earning approval for a mortgage after bankruptcy, industry trends offer an idea of how long one may have to wait. According to Lending Tree, the standard wait times for qualifying for certain types of home loans are as follows:

  • Traditional: Four years for a Chapter 7, two years for a Chapter 13
  • USDA: Three years for a Chapter 7, 1 one for a Chapter 13
  • FHA and VA: Two years for a Chapter 7, one year for a Chapter 13

Should one choose to wait?

A more pertinent question may be when should one try to qualify for a mortgage after filing for bankruptcy. Waiting for a few may offer one additional time to save up for a down payment and repair their credit to point of qualifying for a more favorable interest rate.