Life After Bankruptcy | Conrad Mortgage Ohio

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Life After Bankruptcy:

The Exact Day You Can Apply for a Mortgage in Ohio

A Real Denial Scenario

You finally start feeling like you’re back on your feet. Your bankruptcy is behind you, your credit score has climbed, and you’ve been making payments on time. You apply for a mortgage and get told:

“You’re close, but not enough time has passed.”

The frustrating part?

No one can tell you from what date, or how much longer you actually need to wait. This is one of the most common reasons borrowers are incorrectly denied after bankruptcy, and in many cases, they’re closer to qualifying than they’ve been led to
believe.

Why This Happens

Most borrowers are told the waiting period starts on the filing date of the bankruptcy. That is wrong.

For mortgage eligibility, the clock almost always starts from the discharge date, not when you filed and not when the case closed. Using the wrong date can push your eligibility out by months or even years unnecessarily.

On top of that, different loan programs treat Chapter 7 and Chapter 13 bankruptcies very differently, especially if a Chapter 13 was dismissed instead of discharged.

The Actual Rules That Matter

Below are the waiting periods I use when qualifying Ohio homebuyers. These are based
on how loans are actually approved, not generic internet advice.

Chapter 7 Bankruptcy (Discharged)

Conventional loans

48 months (4 years) from discharge date

FHA & VA loans

24 months (2 years) from discharge date
The clock must be satisfied before the case number assignment
Manual underwriting may be possible inside 24 months, but with much stricter review

USDA loans

36 months (3 years) from discharge date

Non-QM non-prime loans

Possible as early as 12–23 months from discharge
Typically require very strong compensating factors, such as large down payments
Higher interest rates and closing costs due to increased risk

Chapter 13 Bankruptcy (Active or Completed)

This is where a lot of misinformation exists.

FHA & VA

You may qualify while the Chapter 13 is still open
Requirements:
- At least 12 on-time trustee payments
- Trustee approval is always required
I have approved FHA buyers in active Chapter 13 cases after 12 months of payments

USDA

Eligible after 12 months of on-time payments under a Chapter 13 plan

Conventional loans

If the Chapter 13 was discharged:
- 24 months from discharge
If the Chapter 13 was dismissed:
- 48 months from dismissal
This distinction matters and is often overlooked

What Still Gets Borrowers Denied After the Waiting Period

Meeting the waiting period does not guarantee approval.

The two most common issues I see next are:

1. Credit score and re-established credit
2. New derogatory credit after bankruptcy

Automatic “No” Patterns I See

These are deal killers in real underwriting:

Any late payment, collection, or charge-off within 12 months of discharge on:

o Housing
o Installment loans

More than two 30-day late payments on revolving accounts
Late payments after bankruptcy, even if scores look acceptable

Bankruptcy gives you a reset, but underwriters expect to see that you used it responsibly.

Credit, DTI, and Reserves: What Underwriters Actually Look At

Credit Scores I’ve Closed With
These are real-world approvals, not theoretical minimums:

FHA: as low as 580 (manual underwriting)
VA: around 605
Conventional: 620+ after the waiting period

Re-Established Credit Expectations
If the bankruptcy wiped out your old accounts, you must rebuild intentionally.
Common lender overlays require:

2 active tradelines for 12 months, or
3 active tradelines for at least 6 months

Using credit matters. Keeping balances low matters more. Making more than the minimum payment matters most.

Manual Underwriting Reality (FHA / VA)

FHA manual underwriting
- Target max DTI: 43%
VA

o No hard cap, but ideally under 41%

Compensating Factors That Actually Help
The strongest factor I see move files to approval:

Cash reserves, including retirement funds you could reasonably access
- Two months of reserves is a practical minimum in tighter files

What Gets Reviewed in These Files

When underwriting a post-bankruptcy loan, decisions are driven by:

Bankruptcy discharge or dismissal dates
Payment history since bankruptcy
Credit score trends, not just the score itself
Active tradelines and utilization
Debt-to-income ratio
Cash reserves
Letter of Explanation - The letter matters more than most borrowers realize. Automated systems look at numbers and dates. Your explanation goes to a human underwriter who can apply judgment.

A strong letter clearly explains:

What caused the bankruptcy
“Medical issues” is acceptable without sharing diagnoses
What changed afterward
Why the situation is unlikely to repeat

Honest and detailed is always better than short and vague.

A Neutral Next Step

If you’ve been told “not enough time has passed,” the first step is verifying which date is being used and which program is being applied.

That alone often changes the outcome.

I review bankruptcy timelines, credit rebuild progress, and program options based on the borrower’s full picture, not just a single rule or overlay. If the timing truly isn’t right yet, I’ll tell you exactly what needs to happen next and when to check back.

Why Choose Conrad Mortgage?

Conrad Mortgage is based in Strongsville, Ohio, serving Ohio homebuyers and borrowers nationwide with clear eligibility timelines, accurate date verification, and underwriting guidance aligned with how loans are actually approved.

Bankruptcy waiting periods are not guesswork. Discharge dates, dismissal dates, trustee payment history, and program overlays all matter. We verify the exact timeline before giving an answer, so borrowers understand where they stand and what needs to happen next.

Have questions about bankruptcy timelines or mortgage eligibility in Ohio?
Speak with a licensed loan officer to discuss next steps. →

Written by Gen Flieger
Loan Originator
Conrad Mortgage
NMLS # 2667206

02/11/2026

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