Filing for bankruptcy in North Carolina is a common solution for individuals who cannot pay their debts. But after filing for bankruptcy, many people are left wondering whether they will be able to qualify for a mortgage.

There are two main types of bankruptcy that an individual may file: Chapter 7 and Chapter 13. With Chapter 7, an individual won’t set up a repayment plan. Instead, the individual will be discharged of all unsecured debts. Chapter 7 is often referred to as “liquidation” bankruptcy. Chapter 13 bankruptcy is a reorganization bankruptcy. It is designed for debtors who have regular income and have enough left over to make affordable payments to their debt.

Individuals who file Chapter 7 bankruptcy will be eligible after a few years to qualify for a mortgage. For individuals applying for an FHA or VA loan, the waiting period is two years.

For individuals who file Chapter 13, the waiting period is shorter. If an individual is looking for a FHA, VA or USDA loan, the waiting period is one year. However, if an individual is looking for a conventional loan, the waiting period is two years from the discharge or four years from the dismissal. It’s important to note that individuals who can demonstrate that they’ve made 12 months worth of payments on-time and get court approval could potentially qualify for a mortgage.

Bankruptcy isn’t the end; it’s the beginning of financial freedom. For those who have just filed for bankruptcy, it’s a good idea to consider an attorney. An attorney can help individuals move forward from debt by answering questions regarding bankruptcy, discussing debt relief options, and more.