A recent client just called me today about her efforts to get a new mortgage after her bankruptcy discharge was granted.  She and her husband had about $35,000 in credit card debt that they wiped out with a Chapter 7 bankruptcy filing.   They filed their case in April 2011 and their case was approved, and they received their discharge order in early August 2011.  All in all, their case took only 3 and one half months.

At the time of filing their Chapter 7 case, they owned a home and two cars, and they kept all of their property.  They did not reaffirm any of their secured loans.  They simply continued to make their regular monthly payments.   After the bankruptcy however, the wife had expressed an interest on refinancing their mortgage to get a lower rate.

It’s now 2 years and 11 months after their discharge order, and they’ve been able to improve their credit.  The big news is that they’ve just today been approved for a new loan of 3.7 per cent for 20 years.  This is a big reduction because their previous interest rate was 5.5 per cent.   The client is also happy because they are refinancing with a local bank that rarely sells its mortgage loans (unlike their current mortgage loan, which has changed hands numerous times).

The client was determined to refinance, and stated that they were able to qualify due to getting rid of all their unsecured debts, and making sure that their credit reports were accurate, and making all their post-bankruptcy payments on time.

Her story is similar to other stories that I hear from former clients who have refinanced.    If you have questions or comments, please let me know in the section below!