Can You Get a Mortgage While in Chapter 13 Bankruptcy?

You may be able to get a mortgage loan while you are still in Chapter 13 bankruptcy but the chance is quite small because most lenders and bankers would simply ignore your application when they see that you are in bankruptcy. Filing for bankruptcy should only be considered as the last resort when a person finds himself facing a lot of credit problems. However, in certain situations, it may be the only choice.

The two common kinds of bankruptcies that can be filed are Chapter 7 and Chapter 13. A Chapter 7 bankruptcy has been filed through the courts and will erase all existing debt. However, from the point of view of lenders, this is the worst kind of bankruptcy and it is not removed from your credit report until after 10 years have passed.

On the other hand, a Chapter 13 bankruptcy is where the debtor arranges to make some payments to a trustee. Usually, the debtor agrees to repay a certain percentage to what is due to the creditors. The payment process usually takes five years. Lenders are more lenient for Chapter 13 bankruptcy and the bankruptcy usually remains on the debtor's credit report for seven years.

For those who have filed a Chapter 7 bankruptcy, banks and lenders usually would ignore any application for a loan for two to three years. However, a person in Chapter 13 may be able to obtain a home loan through the Federal Housing Administration or FHA if the trustee allows it.

There are a number of requirements for someone in Chapter 13 bankruptcy to get a mortgage loan. First of all, you must obtain permission from your trustee and you must find a lender who will agree to finance your FHA loan. Also, you should not have any collections or any late payments after you have filed for bankruptcy. You must also have a payment history of at least one year. For example, you may obtain letters from your utility companies indicating that you have been prompt in your payments for the past 12 months. An important step to take is to get a copy of your credit report to make sure that there are no records of late payments or collections that have been recorded.

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Moe Bedard
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My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications. I currently live in Carlsbad, California with my beautiful wife and children.
  • Rebecca Seaman

    I filed chapter 13 bankruptcy 3 years ago because of rental properties I owned and tenants not paying. Anyway, I am a pharmacist and make approx 130,00 per year. I know US bank will do a loan while in Chapter 13 with certain criteria that I meet. The trustee says he will approve a loan. The US bank loan is 10% down. Is there any national banks that will do a chapter 13 bankruptcy mortgage loan with 5% down. Thanks in advance :-)

  • kevin


    I too invested in a property which lost approx. 60% of its value after the real estate crash. I consolidated my debt and filled under Chapter 13. I make north of 200k and would very much like to purchase a property. Have you uncovered any bank that would assist in helping someone in my position? Your feedback is greatly appreciated.

  • monica j

    I am currently in a chapter 13 since 2009 and I would like to stop renting and purchase a home I would like to know how i would go about finding a lender to finance a home for us.

  • Bryan Barton

    My wife and I declared chapter 13 bankruptcy in 2009. We have about 6 months before we pay it off. We have about $6000 in savings to put down on a home. Do you know of any banks that would lend to us while still in our bankruptcy to help us buy a home?

  • Evan Bedard

    Hello Bryan,

    Lending standards are VERY stringent in today’s market and I’m not aware of any lender that will finance until two years has passed since the BK discharge. If you’re BK is up in August, unfortunately you won’t be eligible for a mortgage until August 2016..