VA Loans and Bankruptcy

I recently received inquiries concerning VA Loans and whether or not a Veteran or Active Duty member of our Armed Forces could refinance or buy a Home with a VA Loan while in Bankrupcty.  Drum roll please…………………..  and the answer is………… Yes!!!!

VA guidelines want to see the willingness of a borrower to repay future creditors and credit obligations.  If a borrower is currently in Chapter 13 and wishes to buy a home or refinance an existing loan, it is possible if the following are applicable – 1) The Borrower has made 12 consecutive payments to the Trustee on time 2) No new deragotory accounts show up on the credit report after the filing date, i.e. cell phone charge-offs, cable collection, etc. 3) Permission is granted from the Trustee.   4) A detailed explanation for the reason the potential borrower filed Bankruptcy

There are other guidelines that are applicable as well.  Usually if you can satisfactorily pass the test for the 4 items listed above, then you’re probably in pretty good shape to start.

If you have questions, comments or concerns, Please feel free to click here to call me post them here or click here to Talk With Steph.

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Professionally yours,