How Soon After My Chapter 7 Bankruptcy Can I Buy a House or Car?

Your Chapter 7 bankruptcy will stay on your credit report for up to 10 years. Some people believe that they will not be able to buy another home or vehicle until the bankruptcy drops off their credit report. This simply is not true. In fact, you may be able to qualify for a new car or home much more quickly than you might think.

A New Vehicle

Your bankruptcy has just finished. You were able to keep your car when you filed. But is your car going to be able to last another 10 years until your Chapter 7 bankruptcy no longer appears on your credit report? Not likely. However, the good news is, it doesn’t have to.

Typically, you will be able to buy a new vehicle immediately after your Chapter 7 bankruptcy. Now this is not going to be as easy as it once was for you, back when you had good credit and bankruptcy wasn’t listed credit report. But that was probably a long time ago. More than likely, your credit wasn’t all that good when you filed for bankruptcy, and now you also have a bankruptcy on your credit report.

Your lender is probably going to require you to take a few extra steps to qualify for a vehicle immediately after your bankruptcy. For example, it may ask for proof of regular utility statements where you live, or something similar. But whatever extra steps the lender asks for, they should be fairly simple to find and provide to the bank.

You won’t get the best interest rate available with a Chapter 7 bankruptcy on your credit report, but it won’t be the worst available either. One thing lenders like about those who have recently filed for bankruptcy is that they won’t be able to file for bankruptcy in the near future. Additionally, you will have little to no unsecured debt. These two factors make you a good potential customer for the auto lender because you are less likely to file bankruptcy on their auto loan, and you have few debts to compete with their loan for your monthly payments.

A New Home

In order to qualify for a home after filing Chapter 7 bankruptcy, you are going to have to put forth a little more time and effort.  You should be working to rebuild your credit immediately after filing for bankruptcy (link to rebuilding your credit after chapter 7 bankruptcy). This includes getting a copy or your credit report after you bankruptcy to be sure that all of your discharged debt is erased from your credit report. Often, certain individual debts are not reflected as being discharged in bankruptcy on your credit report when they should be. You can contact each of the credit reporting agencies to remove these.

In addition to ensuring the accuracy of your credit report, it will help to have new, positive information appear on your credit after filing for bankruptcy. This could be in the form of a new, secured credit card that you pay off once a month, or a new auto loan.

As with auto loans, there may be a few additional step that you must take to qualify for a home. Assuming you make an effort to improve your credit and provide the additional information requested by the bank, you will be able to qualify for a home in a minimum of two years after you filed for Chapter 7 bankruptcy.