Okay, my wife and I had to file a Chapter 7 Bankruptcy because she went on bed-rest with our third child and I had left a lucrative job a few months before that to go back to school full time. So with this, we racked up HUGE medical bills for her and I had to take out several credit cards to pay the bills. We hoped to get back on track, but the debt was just too overwhelming. We ended up filing in 2008 and it was discharged in May of 2009.

Our scores are right around 600, but we do have two student loans, two car loans, and one small credit card. All of which are paid on time every month. My question is, with this information, can we get a mortgage loan after a year? Also, I have a VA Loan that I have not used yet... will that help?

I would appreciate any insight! Thanks!

How much down payment do you have ? You can not get most loans with a 600 right now.

If you have a 20 or 30 percent down you may be able to.

Next I guess I have issues with your money planning, why did you go back to school if you had such large debts, why did you not lower your cost or standard of living to make it work.

Maybe I did not explain it very well... it was late and I was tired. I left my position before my wife was pregnant and while we love that little guy like crazy... it was not planned. We were just fine with her income and actually did cut back to make it work. So we decided that I would go back to school to get my teaching certification. Well, AFTER we decided all this, she became pregnant and was in danger of losing the baby or dying, and was put on bed-rest for six months. We lost her income and gained over $200K in doctor bills, and we actually tried to work something out, but this with our other bills was just too much. Anyhow, we are in much better shape financially now and I have heard that with extenuating circumstances, you can get a low rate loan after 12 months of good credit history. We are free and clear now with the exception of our vehicles.

Sorry, it sounded like a little different. And to be honest I am sorry, I have just been working with so many people losing their homes lately, bankruptcy has been a issue lately.

But low rate loan, nope won't happen, will be hard to get a loan if credit rate is not over 700 or more right now. If you have a local bank or credit union that you know of and they know you, then they may work better with you.

Hey it really is no problem. I was about as clear as mud the first time. God will not give me more than I can handle. Filing Chapter 7 actually goes against our beliefs, but we felt it was the only way. Anyhow, thank you so much for the information. One last question... if we wait the two years, do we have a good chance of getting a lower interest rate with a prime lender?

Fannie Mae and Freddie Mac who set the guidelines for residential borrowers allow a new mortgage 24 months after a bk. You might start by pulling your credit reports directly from the bureaus and beginning there to see if the trade lines that were supposed to be included in your bk were so that you do not have two derogatory items such as the trade line and the bk. Good luck!

The trade lines? I am sorry, but I am not sure what that is?

Hi there,

A trade line is an account. You probably have multiple negative trade lines or accounts that are listed on your credit reports in addition to the bk. It is an account listed on your credit report. We call them trade lines. Take care.

So, should they simply say "Included in Bankruptcy" on it? Or something to that effect. That is what most of mine say. Should they be off there completely? Thanks for your help!

Hi There,

They should be completely off your credit reports. If you want to write to each of the three main bureaus and get FREE copies of your credit reports which you are entitled to do each year then you can see for yourself what is listed on the reports. Here are the three bureaus for your first step so you can get your FREE reports. Once you get your credit reports you will know where you stand. Good luck!

Equifax
Experian
Transunion