There are two different types of Bankruptcies for most consumers.
1. Chapter 7 Bankruptcy in Kentucky
Chapter 7 bankruptcy involves selling off your assets to pay back your outstanding debts. If you have significant equity in your home, it may be sold. It's possible to keep the property during bankruptcy, but the lender retains a lien on it, meaning you have to keep making payments on the loan or the lender could foreclose on it. Usually done by borrowers you don't have any assets and is filing on unsecured debts like, medical bills, collections, credit cards, personal loans etc.
2. Chapter 13 Bankruptcy in Kentucky
Chapter 13 bankruptcy Instead of using assets to pay off their debt, borrowers can keep their property and enter into a repayment plan. That means you're likely to keep your home if you file for Chapter 13 bankruptcy protection. Usually people with assets do this loan program. i.e. equity in home, and substantial savings account of money that is not tied-up in retirement accounts.
When can you buy a Home After Chapter 7 or 13 Bankruptcy?
It really depends on what type of loan you are getting. I breakdown the different requirements below:
Chapter 7 Bankruptcy Guidelines for FHA, VA and Conventional Loans
Kentucky FHA Loans: FHA loans require that you wait at least two years from your Chapter 7 bankruptcy discharge date before you can buy a home again.
Kentucky VA Loans: You need to waits 2 years from the discharge date.
Kentucky Conventional mortgages: You need to wait 4 years the bankruptcy discharge date before you can apply for conventional mortgage
Chapter 13 Bankruptcy Guidelines for FHA, VA and Conventional Loans.
Kentucky FHA loans: You'll need to wait at least a year from the start of your payout period under Chapter 13 bankruptcy and then prove a perfect pay history with the courts and get permission from the Chapter 13 trustee to borrower a certain amount of mortgage loan. They will say ya or nay-usually they will okay it.
Kentucky VA Loans: You can potentially use a VA loan after 1 year in the Chapter 13 plan, but you must prove an on-time pay history from the courts and permission from the trustee to borrow a certain amount on the mortgage loan.
Kentucky Conventional mortgages: The waiting period for Chapter 13 bankruptcy will depend on whether your case was discharged or dismissed. In the case of dismissal, which doesn't prevent creditors from collecting qualifying debts, you must wait at least four years to refinance, though under extenuating circumstances, you only need to wait two years. If your case was discharged, the waiting period is shortened to two years, regardless of the circumstances.
If you have filed more than one bankruptcy within the past seven years, you have to wait five years before you can qualify for any type of home loan.
Joel Lobb (NMLS#57916)
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
Text/call 502-905-3708
kentuckyloan@gmail.com
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.
Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/
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