An excerpt from Bankruptcy: A New Beginning by Seth Hanson
Most people who file bankruptcy experience a drop in credit score of up to 200 points. However, most people who are coming to see me about bankruptcy already have severely impacted credit. Most people are surprised to learn that filing bankruptcy is probably the quickest way to improve their credit. In fact, after filing bankruptcy most clients experience a relatively rapid climb in credit score. By about 2 to 3 years after filing bankruptcy, the bankruptcy usually no longer impacts people’s credit score, even though the bankruptcy will continue to show up on their credit report for 7 years (Chapter 13) or 10 years (Chapter 7).
Many mortgage brokers I speak to have said that once two years have passed since a person filed a Chapter 7 bankruptcy the bankruptcy no longer stands as an obstacle to their obtaining an FHA mortgage. Of course, the loan underwriters will still look at debt to income ratio, credit score, an appraisal, and every other regular aspect of their underwriting approval process.
For more information contact your Stockton bankruptcy attorney.
Categorized in: Credit