How Long After Bankruptcy Until You Can Buy a House in NJ?

Bankruptcy is a crucial tool that allows people to seek freedom from certain debts. While bankruptcy can reduce many peoples’ financial burdens, it can also create negative consequences for declarants. One of these negative consequences involves a waiting period that filers must endure before applying for a mortgage loan.

Depending on the type of mortgage you are seeking, you will typically have to wait between 2-4 years after the discharge of your Chapter 7 bankruptcy case to buy a house in New Jersey. If you filed for Chapter 13 bankruptcy, then the amount of time you will have to wait can vary depending on how the bankruptcy court decides to manage your case. Generally, it is easier to buy a house after filing Chapter 13 bankruptcy as opposed to Chapter 7.

If you need help with your bankruptcy case, consult with our experienced New Jersey bankruptcy lawyers at Young, Marr, Mallis & Associates by calling (609) 755-3115.

Applying for a Mortgage After Filing for Bankruptcy in New Jersey

When applying for a mortgage in New Jersey, there are several different types of loans that you can seek. The amount of time you will have to wait before applying for these loans is dependent on the type of bankruptcy you declared.

FHA Loans

Federal Housing Administration (FHA) loans are popular with first-time homebuyers. They are insured by the FHA and issued by banks or other approved lenders. Applicants are only required to produce a 3.5% down payment and the credit score requirement is 580.

If you filed for Chapter 7 bankruptcy, then you will have to wait two years before applying for an FHA loan. On the other hand, if you declared Chapter 13, then you may apply for an FHA loan before your case is even discharged. However, you will have to be up to date with your Chapter 13 repayment plan.

USDA Loans

United Stated Department of Agriculture (USDA) loans do not require down payments and can clear the paths to home ownership for suburban and rural homebuyers. These loans are guaranteed by the USDA Rural Development Guaranteed Housing Loan Program. Most loans are issued by partner lenders. However, the USDA has the power to directly grant loans to certain borrowers. This type of loan usually requires that applicants have a credit score of 640 or higher and must be used to buy homes in eligible, rural locations.

If you filed for Chapter 7 bankruptcy, then you must wait three years before you may receive a USDA loan. A different deadline will apply for cases involving Chapter 13. If you filed for Chapter 13 bankruptcy, then you must wait one year after your case is discharged before applying for a USDA loan

VA Loans

The U.S. Department of Veterans Affairs (VA) grants VA loans to qualified borrowers as a part of their military benefits. These types of loans permit veterans, active-duty service members, and eligible surviving spouses to finance their homes without producing down payments. Further, successful applicants do not have to purchase mortgage insurance or abide by overly strict credit requirements. Still, those applying for VA loans will generally need to have a minimum credit score of 640.

If you applied for Chapter 7 bankruptcy, then you must wait two years after your case is discharged before applying for a VA loan. Meanwhile, individuals who declared Chapter 13 bankruptcy may apply for a VA loan at any point, so long as they have not fallen behind on their repayment plans.

Conventional Loans

Conventional loans are loans that are not backed by government agencies. These loans can come in several shapes and sizes. While they do not offer the same benefits as FHA, USDA, or VA loans, they are still the most common type of mortgage loan that people apply for.

Conventional loans can be harder to get after filing for bankruptcy. Typically, longer waiting periods will apply. For instance, if you filed for Chapter 7 bankruptcy, then the typical waiting period you must endure before receiving a conventional loan will be four years from the date of discharge. However, under extenuating circumstances, our Marlton, NJ bankruptcy lawyers may help acquire a conventional loan two years after your Chapter 7 case is discharged.

If you filed for Chapter 13 bankruptcy, then you will have to wait two years after your case is discharged before applying for a conventional loan. If your case was dismissed rather than discharged, then you will have to wait 4 years before you can receive such a loan.

Building Your Credit Back Up After Filing for Bankruptcy in New Jersey

One of the most impactful consequences of a bankruptcy filing is the negative impact on declarants’ credit scores. Having good credit is a crucial aspect of successfully purchasing a new home. Typically, those who have higher credit scores will be able to acquire mortgage loans more easily. Accordingly, it is crucial that you work to build your credit back after filing for bankruptcy in New Jersey.

There are multiple ways that you can rebuild your credit score. As an example, you can improve your credit by making payments towards debts that were not discharged in your bankruptcy case. Furthermore, you may rebuild your credit score by securing new forms of credit and making small purchases that are paid in full and on time. Submitting consistent payments on time over lengthy periods of time will serve to improve your credit score. Finally, you can also help your credit score by merely monitoring the score and checking it from month to month.

Still, the length of time it takes to rebuild your credit can be very frustrating. The amount of time your score will remain impacted can depend on the type of bankruptcy you filed for.

Those Who File for Bankruptcy in New Jersey Can Call Our Law Firm for Support

Seek guidance from our experienced Cherry Hill, NJ bankruptcy attorneys at Young, Marr, Mallis & Associates by calling (609) 755-3115.

Related Articles

The Bankruptcy Process

Many people live paycheck-to-paycheck or have minimal savings. These circumstances mean that even a small financial setback could result in a crisis. When you cannot pay your utility bills, mortgage, […]

Read More »

How Bankruptcy Can Protect You

Filing for bankruptcy is often thought of as a sign of failure. At best, it is seen as a last resort when faced with too many bills, collection letters, or […]

Read More »

Means Testing in Chapter 7 or Chapter 13 Bankruptcy

Bankruptcy has many layers. Before filing, a potential debtor will have to gather their bills, bank statements, tax returns, and proof of all household income for the previous six months. […]

Read More »

Have an Attorney Review Your Case for Free

Get a Free Case Evaluation

Contact Our Attorneys To Learn How We Can Help Your Case


12 Convenient Locations Across Pennsylvania and New Jersey

Philadelphia, PA

7909 Bustletown Ave, 1st Floor Philadelphia, PA 19152 (215) 607-7478 Get Directions

Quakertown, PA

328 Broad St. Quakertown, PA 18951 (215) 515-6876 Get Directions

Allentown, PA

137 N 5th St. Suite A Allentown, PA 18102 (215) 240-4082 Get Directions

Jenkintown, PA

135 Old York Road Jenkintown, PA 19046 (215) 544-3347 Get Directions

Easton, PA

101 Larry Holmes Dr. #212 Easton, PA 18042 (215) 515-7077 Get Directions

Bala Cynwyd, PA

2 Bala Plaza, Suite 300 Bala Cynwyd, PA 19004 (610) 557-3209 Get Directions

Bensalem, PA

3554 Hulmeville Rd, #102 Bensalem, PA 19020 (215) 515-6389 Get Directions

Plymouth Meeting, PA

600 W. Germantown Pike #400 Plymouth Meeting, PA 19462 (215) 515-6876 Get Directions

Harrisburg, PA

2225 Sycamore St Harrisburg, PA 17111 (717) 864-8887 Get Directions

Cinnaminson, NJ

909 Route 130 South #202 Cinnaminson, NJ 08077 (609) 796-4344 Get Directions

Hamilton Twp., NJ

100 Horizon Center Blvd., 1st and 2nd Floors Hamilton Township, NJ 08691 (609) 236-8649 Get Directions

Marlton, NJ

10000 Lincoln Drive E One Greentree Centre, Suite 201 Marlton, NJ 08053 (856) 213-2805 Get Directions

Piscataway, NJ

200 Centennial Ave. Suite 200 Piscataway, NJ 08854 (908) 367-7256 Get Directions