Can I Buy a House With Chapter 7 Bankruptcy?

Filing for Chapter 7 bankruptcy can be a fresh start, but many people worry it will close the door to future opportunities—especially homeownership. If you're wondering, “Can I buy a house with Chapter 7 bankruptcy?” the good news is: Yes, you can. But there are important timelines, credit considerations, and financial steps to keep in mind.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy helps individuals wipe out unsecured debts like credit cards and medical bills. It provides fast relief—usually within 3 to 6 months—but it also stays on your credit report for up to 10 years.

That said, it doesn’t prevent you from ever buying a home. With the right planning and patience, many people go on to qualify for a mortgage and become homeowners after filing.

When Can I Buy a House After Chapter 7 Bankruptcy?

The answer depends on when your case was discharged and what kind of loan you're applying for. Below are general waiting periods required by most lenders:

Loan Type	When You Can Apply After Chapter 7
FHA Loan	2 years after discharge (with court approval)
VA Loan	2 years after discharge
USDA Loan	3 years after discharge
Conventional Loan	4 years after discharge

Note: Some lenders may offer options sooner with strong credit and a solid down payment.

How to Improve Your Chances of Buying a Home Post-Bankruptcy

To qualify for a mortgage after bankruptcy, you’ll need to rebuild your financial profile. Here’s how to start:

1. Rebuild Your Credit

• Get a secured credit card or credit-builder loan

• Make payments on time, every time

• Keep your credit utilization low

2. Show Stable Income

Lenders want to see steady employment and enough income to cover mortgage payments.

3. Save for a Down Payment

Saving 3% to 20% of the purchase price can improve your odds of loan approval and lower your monthly payments.

4. Get Pre-Approved

Once you’re eligible, get pre-approved so you know how much home you can afford and what loan programs are available to you.

Can You Buy a Home During Chapter 7 Bankruptcy?

Usually not. While your case is active, your finances are under court supervision. You won’t be able to take on new debt, including a mortgage, without court approval—which is rarely granted for major purchases like a home.

You’ll typically need to wait until your Chapter 7 case is discharged and closed before starting the home-buying process.

Work With a Bankruptcy Attorney Who Understands Your Goals

At Kamini Fox, PLLC, we don’t just help clients file bankruptcy. We help them plan for what comes next. Whether you're looking to rebuild credit, protect future income, or prepare for a home purchase down the line, we’ll guide you every step of the way.

Serving clients across Long Island and New York City, we understand the local housing market and how to navigate both bankruptcy law and future financial planning.

FAQs: Buying a House After Chapter 7

Q: Can I qualify for a mortgage after Chapter 7 bankruptcy? Yes, but most lenders require you to wait at least 2 years after discharge. You’ll also need to rebuild your credit and show financial stability.

Q: Will Chapter 7 bankruptcy affect my ability to get a loan forever? No. While Chapter 7 stays on your credit report for up to 10 years, the impact fades over time—especially if you take steps to rebuild your credit.

Q: Can I buy a house with cash after bankruptcy? Yes. However, if you just filed for a Chapter 7 bankruptcy liquidation, it means you have no money. If you purchase a home for cash right after bankruptcy, any one of your creditors (if they are aware of it) can notify the bankruptcy court by reopening your bankruptcy case and you can be charged with bankruptcy fraud. Therefore, it is highly unlikely that you will have cash to purchase a home right after bankruptcy but you can do it if someone gives (gift) you the cash for example or you win the lottery.

Q: Should I wait to file Chapter 7 if I plan to buy a home soon?It depends. The bankruptcy will have a negative impact on your credit and lenders will not consider you for a mortgage until at least 2 years after a bankruptcy discharge. If you’re overwhelmed by debt and need immediate relief, bankruptcy may be the right move since it will wipe the slate clean and pave the way to obtain a mortgage in 2 years. A bankruptcy attorney can help you weigh your options.

Schedule a Free Consultation With Kamini Fox Law

If you’re thinking about bankruptcy but worried it might prevent you from becoming a homeowner, let’s talk. We’ll explain your options and help you move forward with confidence.

Call (516) 493-9920 or schedule a consultation online today.