Can I get a mortgage if I’ve claimed Bankruptcy?

By Theresa Grant Real Estate Columnist Many people wonder if they can ever get a mortgage if they have claimed bankruptcy in the past. In short, the answer is yes, you can certainly get a mortgage after claiming bankruptcy. While a bankruptcy filing can and sometimes does remain on your credit report for up to 10 years, the good news is that you don’t have to wait that long to get a mortgage. Most lenders require a 2-year wait period after discharging a bankruptcy. That 2-year period can serve you well in reestablishing yourself financially. If you are going through bankruptcy or a consumer proposal and home ownership is a future goal, you’ll need to talk about this with your trustee or insolvency counselor. There are steps that need to be taken, but they can guide you through the process with your future goals in mind. There are certain requirements to be met in order to discharge bankruptcy in Ontario. Your trustee would go over this with you. It is a legal process to eliminate your debt that takes at least 9 months to complete. Once the bankruptcy is discharged, the rebuilding really starts. Prior to discharge you’ll be hard pressed to find any lender that will accept an application for credit from you. It may be difficult to even rent an apartment in the early days after filing for bankruptcy. At the 2-year mark from filing for bankruptcy you can start applying for credit. You will probably find there are not a lot of takers at this point, however there are steps you can take to start the rebuilding of your credit. One step that a lot of people start with is the prepaid credit card. This is a great way to start the rebuilding process as there is no risk to the lender, so you are almost always accepted as a client. With this option, you send the company a certain amount of money and they apply it to a credit card in your name. You can then use the credit card the same way you would use any other credit card and make your payment at the end of the month or whenever the payment due date is. The Company or bank that has issued the card will in turn report the payment to the credit bureau. Bankruptcy can often be a very difficult situation for people that invokes feelings of guilt or shame. If you find yourself in the position of having to declare bankruptcy, please try to remember that the option is there for a reason. There is no shame in wiping the slate clean. If you can, try to look at it as a fresh financial start. A way to take what you’ve learned and move forward with a new resolve. People go through insolvency for many different reasons and regardless of the reason you find yourself staring at this option, just know there can be a bright future for those who do, on the other side of it. Questions? Column ideas? You can email me at newspaper@ocentral.com