After bankruptcy, can a debtor obtain credit?
Yes, although the decision will vary depending on the particular lender. Some lenders may consider a more balanced debt/income ratio and an inability to obtain another chapter 7 discharge for the next 6 years to be plus factors in evaluating a prospective borrower. Other lenders will consider a bankruptcy a permanent indicator of poor judgment. Other factors lenders might consider include: stability of employment and/or residence; time elapsed since bankruptcy; and level of income. In general, if a debtor otherwise qualifies, two years after a discharge, Fannie Mae and Freddie Mac will not hold the bankruptcy against the debtor when attempting to obtain a low interest mortgage. Note that while in chapter 13 in the Eastern District of Michigan, a debtor must obtain permission before making purchases or obtaining loans which exceed $1,000.00.
