The aftermath of declaring Chapter 7 or Chapter 13 bankruptcy can be complicated, but the good news is you're beginning again with a fresh outlook. While you know your bankruptcy wasn't caused by laziness or irresponsibility, the process of obtaining a mortgage can still prove to be complex. Fortunately, there are plenty of options available.
The Federal Housing Administration, or FHA, specializes in insuring loans for borrowers who have previous financial issues excluding them from conventional loans. Those working on improving low credit scores or people who have filed for bankruptcy can receive special interest rates and terms much lower than subprime loans through the FHA. These loans don't require a minimum credit score.
If you've filed for a Chapter 7 bankruptcy, your debt obligations will be dismissed - and the FHA can help insure a mortgage. To qualify, you'll have to work on building a credit history within the two years preceding the mortgage, avoiding late payments and other blemishes on your record. Speaking with a credit counselor can help you develop a plan of attack.
After filing for Chapter 13 bankruptcy, you'll be working on a court-ordered repayment schedule. As such, because you'll have a record of rebuilding credit and paying back your debts, the FHA only requires a 12-month wait from the date you begin making payments.
What it all comes down to is building new habits, which you don't have to do alone. A Kentucky bankruptcy lawyer can help through the filing process, and a finance counselor can help you rebuild after getting a fresh start.