Getting a New Mortgage After Bankruptcy in Rocklin

Attorney Image By: James Filippi
Getting a New Mortgage After Bankruptcy in Rocklin

Filing for bankruptcy is a big step that can have a lasting impact on your financial future. One of the biggest challenges individuals face after bankruptcy is obtaining a mortgage. However, contrary to popular belief, it is not an impossible feat. With careful planning, determination, and a good strategy, individuals can rebuild their credit and own a home. In this article, we will dive into the process of securing a new mortgage after bankruptcy. By understanding the nuances and taking proactive steps, you can pave the way to financial recovery, stability, and homeownership. 

Understanding Bankruptcy and Its Impact on Mortgage Eligibility 

There are different possibilities depending on your bankruptcy situation, each with its own implications for your credit and mortgage eligibility. 

Chapter 7 Bankruptcy: Chapter 7 bankruptcy involves liquidating assets to pay off debts. This type of bankruptcy can stay on your credit report for a decade, which impacts your ability to build creditworthiness. 

Chapter 13 Bankruptcy: Chapter 13 bankruptcy allows individuals to reorganize their debts and create a repayment plan. A discharged Chapter 13 bankruptcy stays on your credit report for seven years, making it challenging to secure credit, especially a mortgage. 

Rebuilding Credit After Bankruptcy 

Rebuilding your credit takes time, patience, and meticulous effort. Here’s how you can start the process of getting back on track: 

Review and repair Your Credit Report: Start by obtaining copies of your credit reports from major credit bureaus: Equifax, Experian, and TransUnion. Examine the reports for mistakes, inaccuracies, or unauthorized accounts. Dispute any discrepancies you find to ensure your credit report accurately reflects your financial situation. 

Make a Budget: The foundation of financial stability is creating a realistic budget. It assists you in saving money, managing expenses, allocating income effectively, and making on-time payments on debts. Budgeting gives you financial control and shows your responsibility to potential lenders. 

Secured Credit Cards: When you’re trying to rebuild your credit, a secured credit card is a powerful tool. Unlike regular credit cards, secured cards require a security deposit, which often becomes your credit limit. You demonstrate your ability to manage credit effectively by using this card responsibly and making timely payments. 

On Time Bill Payments: Consistently paying your bills is key to rebuilding credit. This includes credit card bills, utility payments, rent, and any other debts. Timely payments indicate financial responsibility and positively impact your credit score over time. 

Working with a bankruptcy-friendly lender for a new mortgage

One of the critical challenges after bankruptcy is finding a lender willing to work with you. Not every lender is willing to work with borrowers who have filed for bankruptcy. Subprime lenders are experts at providing mortgages to individuals with imperfect credit. Working with these lenders can significantly enhance your chances of mortgage approval. 

Factors lenders take into Account 

Lenders evaluate several factors to assess your creditworthiness and determine your eligibility for a mortgage: 

Stable Income: Lenders look for a steady source of income. A steady job and a consistent income stream assure lenders of your ability to make monthly mortgage payments. Employment history and job stability are important considerations in the lender’s decision-making process. 

Down Payment: Saving for a sizable down payment reduces the loan amount but also showcases your commitment to the investment and reduces the risk for lenders. 

Debt-to-Income Ratio: Lenders carefully review this ratio, which contrasts your monthly debt payments to your gross monthly income. A lower debt-to-income ratio increases your creditworthiness, which makes you a more appealing borrower. 

Emergency Funds and Reserves: Having savings demonstrates sound financial standing. Lenders feel more secure knowing they have a safety net to fall back on in case of unexpected expenses. Reserves act as a financial cushion, assuring lenders of your ability to weather financial challenges. 

Government Programs and Assistance 

Fortunately, several government-backed programs aim to assist individuals with a history of bankruptcy in getting a mortgage: 

FHA Loans: The Federal Housing Administration (FHA) offers loans with lower down payment requirements and more lenient credit score standards, making them accessible to borrowers with past bankruptcies. FHA loans are particularly beneficial for individuals with limited financial resources. 

VA Loans: These loans are a good choice if you are a veteran or an active-duty military member. These loans frequently feature competitive interest rates, lenient credit requirements, and no down payment requirements. VA loans are a well-deserved benefit for those who have served their country. 

USDA Loans: The U.S. Department of Agriculture (USDA) provides loans to eligible rural and suburban homebuyers. These loans offer low interest rates and, remarkably, require no down payment. USDA loans are an excellent opportunity for those who live in approved rural areas. 


Securing a new mortgage after bankruptcy is undoubtedly a challenging endeavor. However, it is a journey that, with perseverance and the right strategies, can lead to the realization of your dream of becoming a homeowner. 

By focusing on rebuilding your credit, working with understanding and experienced lenders, and exploring government assistance programs, you can overcome the hurdles that bankruptcy imposes. The key is to stay committed to your financial goals, stay informed about your options, and seek the advice of professionals when needed. 

Remember, the path to homeownership is not linear. There might be setbacks and challenges along the way. However, each step you take towards rebuilding your credit and responsibly managing your finances brings you closer to your goal. Seek guidance, be patient, and stay determined—your dream of owning a home can and will become a reality. With the right approach and a positive mindset, you can turn the page after bankruptcy and embark on a new chapter of financial stability and homeownership. 

Chapter 7 Bankruptcy, Chapter 13 Bankruptcy

Filippi Law Firm, P.C., provides legal services in estate planning, probate, trust administration, trust litigation, and personal bankruptcy in the greater Sacramento area, with a focus in Rocklin, Roseville, Lincoln, and Granite Bay. Give us a call at (916) 333-7910 or fill out the contact form to get in touch with our office. Consultations are free, and they can be done over the phone, via Zoom, or in person at our office in Rocklin.

Satisfied Client Stories


We had a great experience. Jennifer and staff were very helpful and knowledgeable. It made our process extremely smooth and stress free.

Gayla T. | Sacramento, CA

Very pleased with the timely fashion adding our new home to our trust. We tried doing it ourselves but it ended up being a hair pulling situation.

JoAnn S. | Roseville, CA

Excellent knowledge and handled my issues superbly.

Rick R. | Fairfield, CA

Very good service, I am happy with my decision, the service Bryan Walters provided was great, friendly and easy to understand. The whole process went very well and fitted with my schedule.

Trang T. | Roseville, CA

I Highly recommend this firm.

Russell O. | Rocklin, CA

Professional, detailed, helpful, patient and flexible.

Kerry L. | Granite Bay, CA

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