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VA Home Loans and Bankruptcy: What You Need to Know

Bankruptcy happens to the best of us. Perhaps you were let go from your job, went through an expensive divorce, or had to pay for unexpected medical expenses. Your reasons for filing for bankruptcy are personal and are no one’s business but your own. And once you’ve gained control of your financial situation, you deserve a shot at homeownership just like everyone else – it’s the American dream. If you’re a veteran or active-duty military member, you may be wondering how VA home loans are affected by bankruptcy. Here’s what you need to know.


VA Loans After Bankruptcy

Filing for bankruptcy doesn’t automatically disqualify you from being able to obtain a VA home loan. In fact, because VA loans are typically easier to qualify for, they may be a better option for veterans who have filed for bankruptcy in the past. However, there are some important guidelines and limitations to be aware of.


Can I Get a VA Loan After Filing for Bankruptcy?

To be clear, yes, it is possible to get a VA loan after filing for bankruptcy. However, you will need to meet certain stipulations. Additionally, your eligibility may depend on the type of bankruptcy you filed for, how long it’s been, and your current financial circumstances.


Waiting Period after Filing for Bankruptcy

Generally, there’s a waiting period that applies to veterans that have filed for bankruptcy before they can once again become eligible for a VA home loan. This waiting period usually lasts from about one to two years.


VA Loans and Chapter 7 Bankruptcy

Chapter 7 Bankruptcy allows for the liquidation of assets in order to pay back debts. It relieves you from having to pay back unsecured debts such as credit cards and personal loans.

If you’ve filed for Chapter 7 Bankruptcy, you will most likely need to wait at least two years before you can qualify for a VA home loan. For conventional loans, the repayment period is about four years, so the timeline with a VA loan is much shorter. 


VA Loans and Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is often described as “repayment plan bankruptcy.” When you file for Chapter 13 Bankruptcy, you get the opportunity to partake in a payment plan to repay your debts. Payment plans usually last about three to five years.

If you’ve filed for Chapter 13 Bankruptcy and have made all your payments on time, you can apply for a VA loan after one year. For conventional loans, this waiting period is twice as long and lasts about two years.


Do You Have Questions About Your VA Home Loan Eligibility?

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