Lenders will look for income verification and your down payment, in addition to your credit.  You may be able to qualify for 100% financing if you’ve re-established good credit.  After your bankruptcy has been discharged you can usually qualify as long as most of your payments have been reported to the credit bureaus as having been paid on time.

Do you want to buy a home sooner than two years after your bankruptcy has been discharged?  In this case, you will usually need to have a flawless payment history since the discharge.  You will probably also need money for a down payment.  FHA and VA home loans are another option to consider.  VA and FHA loans can be obtained as soon as one year after filing for either Chapter 7 or Chapter 13 bankruptcy.  In order to qualify to buy a home after bankruptcy, you need to begin rebuilding your credit as soon as possible.  Make consistent on-time payments, and keep your total debt balances less than 50% of your total credit lines.  Focus on paying-off all balances as soon as possible.

Given your history of bankruptcy, lenders will closely look at your debt to income ratios.  Keep a close eye on your total liabilities so that you don’t find yourself with too much debt.  You will need documentation supporting your total monthly income (i.e. paystubs) and bank account balances.  If you are self-employed (and pursuing a full documentation loan), you will need the past two years’ worth of tax returns.  Your lender will calculate how much home you can afford to buy.  Be cautious when buying your home – don’t buy something you can’t easily afford.  You don’t want to end up in bankruptcy again, so make sure you can easily afford the monthly mortgage payment.

Before you visit a car dealer for a car loan, be sure to review your credit report.  Make sure that all accounts that were included in your bankruptcy are showing as closed.  Check to see if there are any errors.  It’s common after a bankruptcy to see open accounts that should be closed.  If certain accounts are being inaccurately reported to the credit bureaus, it may be hurting your credit score.  Large errors on your credit report can prevent you from qualifying for a car loan.

After you’ve determined that your credit report is free of errors, review your budget and determine how much you can spend on a car.  Consider both the term of the loan (how long you will be making payments) and the total loan amount.  When you visit the car dealer and apply for financing, you will probably be asked about any past bankruptcies.  Be honest and explain why you filed for bankruptcy – and the steps you’ve taken to improve your finances.  Be sure to mention any improvements to your credit score.

For the best interest rate, consider using an online car loan lender.  Online lenders work with thousands of loans and can usually give you a better deal than a local car dealership can.  Once you are approved with an online car loan lender, they will send you a check for the total car purchase amount.  You will take this check with you when you visit local dealerships to shop for cars.  This check proves to the local dealerships that you have already been approved for a car loan.  Using these tips, you should be able to get approved for a car loan even with bad credit or a past bankruptcy.

Usually, it’s more challenging to re-establish credit after a Chapter 7 bankruptcy compared to a Chapter 13 bankruptcy.  Chapter 7 bankruptcy is the darkest mark you can have on your credit record.  In Chapter 7 bankruptcy, all your debts are discharged (with the exception of child support, alimony, and a handful of other debts that are not allowed to be discharged). This makes it extremely unlikely that you will qualify for a new loan or credit card for at least two years.  Fortunately, you can qualify for a federal student loan and other types of educational loans – even with your past bankruptcy.  This is because educational loan providers are prohibited from discriminating against students based on credit factors.

In a Chapter 13 bankruptcy, you will be making payments to your creditors according to the established repayment plan.  A Chapter 13 bankruptcy shows creditors that you are willing to pay-off your debts, rather than completely discharge them.  Creditors generally view Chapter 13 more positively, compared to Chapter 7 bankruptcy.  With a Chapter 13 bankruptcy, you may be able to obtain new credit within a year (at high interest rates).

Bankruptcy can also affect your ability to qualify for a home loan – but only temporarily.  You may be able to get a home loan beginning two years after a Chapter 7 bankruptcy has been discharged, and one year after filing a Chapter 13 bankruptcy.  Veterans’ Administration (VA) loans and FHA loans can be obtained as soon as one year after filing for either Chapter 7 or Chapter 13 bankruptcy.

To prevent abuse, three minor exceptions exist.  These exceptions are: inheritances, property settlements, and life insurance benefits.  If you receive a property settlement, inheritance, or life insurance benefit within 180 days after filing for bankruptcy, the property or money may have to be paid to your creditors.  Aside from these three exemptions, you are free to own anything you like after bankruptcy.

Would you like to own a home after bankruptcy?  Home ownership is possible – however, you will usually have to wait for a certain period of time before lenders will work with you.  Depending on the factors involved, you can qualify for a home loan beginning two years after a Chapter 7 bankruptcy has been discharged.  For a Chapter 13 bankruptcy, you typically need to wait only one year after filing.  FHA mortgage loans and VA mortgage loans can be acquired as soon as one year after filing for either Chapter 13 or Chapter 7 bankruptcy. In order to qualify for financing to own a home, car, or other large-ticket item, you will need to re-establish good credit.

After bankruptcy, you are free to buy a new car and open new checking and savings accounts.  Assuming you have not bounced a lot of checks in the past, anyone can open a new checking account after filing for bankruptcy.

If you plan to claim “undue hardship,” then you must file a separate motion with the bankruptcy court, and appear before the judge to explain your situation.  Unless you are physically unable to work, it’s extremely unlikely that you will convince the judge to discharge your student loans.  If most of your debt consists of student loans, then you may be better-off pursuing alternative arrangements – instead of filing Chapter 7 bankruptcy, since this debt is not likely to be discharged.

Even though you can’t typically discharge student loans, you can consolidate them under a Chapter 13 repayment plan. Another available option is challenging the loan balance under Chapter 13.  If your student loans have been transferred between multiple lenders several times, and it’s unclear how much is owed, then you can get a court determination of the actual loan balance. A judge will determine how much you owe and the court decision is binding for the student loan lender.  The decision is binding, even if the repayment period extends beyond the end of your bankruptcy repayment period.

Another available option is negotiation.  Consider negotiating with your student loan lender for a longer repayment period.  You may also be able to request temporary deferment until your financial circumstances improve.  Consolidating your student loan debts into a single large loan is another possible option.

A qualified retirement plan is a tax-deferred plan created by employers for their employees.  Plans that qualify include 401(k), 406(b), profit sharing plan, IRAs, SEP-IRAs, SIMPLE plans, money purchase plans, and defined benefit plans.  Depending on the type of debt you owe, the Texas retirement exemption may also apply to social security benefits. This exemption does not prohibit you from borrowing from your retirement plan and allowing a lien to be placed on your interest in the retirement plan (in order to secure a loan).

There is one caveat to the Texas retirement plan exemption.  It involves defaulting on a loan for which your retirement plan was used as collateral.  For example, let’s assume that you took out a home loan and used your retirement plan as collateral (security) for the loan.  If you default on the home loan, your retirement plan may not be allowed to serve as an exemption in your bankruptcy case.

Retirement plans for the following groups qualify for the Texas retirement exemption under both federal and Texas bankruptcy law: teachers, judges, police officers, municipal employees, elected officials & state employees.  Retirement plans for teachers, Texas County, Texas district employees, law enforcement officers, firefighters, and emergency medical personnel also qualify under both Federal and Texas bankruptcy law.

Food is classified as exempt personal property, and so are home furnishings (including family heirlooms).  Home furnishings include sofas, tables and other furniture.  Video recorders, electrical equipment, and cordless phones are not considered home furnishings and cannot be included in personal property exemptions.  Jewelry and unpaid commissions can also be claimed as personal property exemptions – however, both are limited to 25% of the total personal property exemptions ($30,000 for singles, $60,000 for families).

Clothing (anything you wear on your body, except for jewelry) is exempt under the Texas bankruptcy laws.  Household pets and certain life insurance policies can also be claimed as exemptions.  Tools of the trade are also exempt.  Tools of the trade are defined as anything you must use to conduct your profession.  For example, if you’re a landscaper, an expensive lawn mower may qualify under this exemption.  Two firearms are also allowed to be claimed as exemptions. Bikes, tennis rackets, baseballs, treadmills and other exercise equipment can be claimed as personal exemptions.  Only small personal equipment can be claimed under the sport equipment category.  This means that boats, and other sports equipment designed for multiple people do not qualify under as an allowed exemption.

Wages received for personal service are completely exempt, except when they are being seized for child support payments.  Self employed individuals are not protected under this exemption. Self employed wages will be treated as unpaid commissions and are included in the property subject to the exemption cap.  Self employed wages cannot exceed 25% of the cap.

Health aids are exempt with no cap on their value.  Health aids can include contact lenses, hearing aids, wheelchairs, glasses, and therapeutic equipment.  Farming and ranching vehicles can be claimed as exemptions.  Farm animals are also exempt (certain limits and conditions apply). Motor vehicles with 2, 3, or 4 wheels are also exempt. Only one motor vehicle exemption is allowed per family.  Even if a family member does not have a driver’s license yet, you may be able to get a vehicle to qualify if the family member depends on someone else to transport them in the vehicle.

When you file your bankruptcy petition, you will include a list (schedule) of your exempt property.  This schedule will include a description of the property, the law authorizing the exemption, the value of the exemption, and the market value of the property. The market value of the property is used for assessment purposes by creditors who may object to your exemptions.  Creditors have 30 days after the meeting of creditors to object to your stated exemptions.  If a creditor objects, they are required to prove that you’ve improperly claimed the exemption.

There are several categories of bankruptcy property exemptions.  These include the homestead exemption, automobile exemption, exemptions for household goods & furnishings, and retirement asset exemptions. The amount of allowable property exemptions vary.  The allowable amounts are determined by state or federal law.

Previously, property exemptions were based entirely on state law. Today, there are uniform federal standards for most states, with the exception of certain states that have opted-out of the federal standards.  To complicate things further, in 16 states, debtors are allowed to choose whether they will follow the maximum exemption amounts allowed by federal law – or whether they will follow the maximum exemption amounts allowed by state law.  Consult your bankruptcy attorney to determine the allowable exemption amounts in your particular state.