Many people are concerned about the impact of a Chapter 7 or Chapter 13 filing on their credit scores, which always drop low after a bankruptcy is done. A lot of those consumers worry that it will be a long time before they can get a mortgage or another major loan. This is a valid concern, one that must be weighed against even bigger concerns about what you can do to get out of a personal financial crisis that may have been caused by a health problem, a divorce, a job loss or another stressful occurrence in your life.

So, how long does it take before a mortgage company will give you a (first or second) loan for a home, after a bankruptcy? There isn’t one clear answer to that question because many “credit” factors play into an individual’s ability to get a significant loan, but we can address some of the essentials.

Isn’t it seven to ten years?

The short answer is NO! It is well known that a bankruptcy filing can appear on a credit report for seven to ten years, but that does not AT ALL mean it’ll take that long to rebuild your credit to a place where you can get a mortgage. Generally speaking, though, it’ll probably take a couple of years.

What is the biggest issue?

Mortgage lending decisions are complex and risk-focused, made with a number of criteria in mind. One of the biggest factors for most lenders is credit SCORES, which come from three main sources. It is possible to have high credit scores 3-5 years (or less) after a bankruptcy.

Most of the time, when people say, “I have bad credit,” they’re saying their credit scores are low. And in many cases, lenders look at creditworthiness through the score lens. Of course, they also look at income.

What can I do to speed up the process?

IF bankruptcy is right for you and you file under Chapter 7 or Chapter 13, you’ll no doubt want to get your credit scores up as soon as possible. How? It takes time, but the concept is simple. Ready?

The best thing is to do what may be hard to do NOW — pay your bills on time, don’t spend money you don’t have, and don’t borrow what you can’t handle. That, over time, will get you high credit scores that will enable you to get a mortgage and reach other financial goals you may have. As with any major legal decision, get the advice of an attorney if you think bankruptcy could help you.