Tuesday, June 19, 2012

Is a VA Loan Available After Filing Bankruptcy

By Luke Arthur

When you file for bankruptcy, you might think your ability to qualify for a mortgage loan again in the near future has been eliminated. While this might be true for regular mortgages, if you are a veteran or a member of the active military, you might still be eligible to borrow with a loan backed by the U.S. Department of Veterans Affairs.

The U.S. Department of Veterans Affairs is a government agency that provides benefits for those who have served in the military at some point. The VA does not directly provide loans to borrowers who qualify. Instead, it provides a guarantee for the lender on the borrower's behalf. This makes it easier for borrowers to qualify because the lender is taking less direct risk by giving them a mortgage, and makes it possible for those with bad credit situations to get approved for a loan.

Chapter 7 bankruptcy is a type of legal protection that allows you to liquidate your assets and have your debts discharged. If you file this type of bankruptcy and then try to get a VA loan, you have to wait at least two years before you can qualify. The two-year window begins when the bankruptcy is actually discharged instead of starting at the date of filing. You also have to give an explanation for the bankruptcy.

Chapter 13 is another type of bankruptcy that allows you to set up a repayment plan with your creditors and then eventually have some of your debt discharged at the end of the repayment period. If you file this type of bankruptcy, you have to wait at least one year before you can get a VA loan. Before you can move forward with this type of loan, you have to get permission from the bankruptcy trustee in your case.

Even though it is possible to get a VA loan after you have filed for bankruptcy, it is not easy to get approved if you have late payments on your record. After you file for bankruptcy, you need to organize your payment schedule. The lender requires you to have a solid payment history after your bankruptcy has been discharged. This proves you are interested in rebuilding your credit after getting a break through the Bankruptcy Court.


http://www.lenderva.com

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