If I File Bankruptcy Will I Be Able to Get a VA Loan or Mortgage Again? – Mike

“Dear Steve,

Hello I am an unemployed male with some income whom is facing divorce with no children. I am considering a bankruptcy to sever things but I have a VA mortgage and cant get the house sold. When I move out I want to retain my VA benefits. I understand that if I have to file bankruptcy I will lose the VA Benefits.

What will my wife have (need) to do to keep the house If I file bankruptcy. I know that a VA loan requires the VA Benefits recipient to occupy the property. I want to force her to get her own financing and off my loan. Can I do that?


Dear Mike,

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

Here is what the VA has to say about bankruptcy and the VA loan:

Q: Can I get a VA loan if I have had a bankruptcy in the last few years?

A: The fact you and/or your spouse have been adjudicated bankrupt does not in itself disqualify you for a VA home loan. The following rules apply:

  • If the bankruptcy was discharged more than 2 years ago, it may be disregarded
  • If the bankruptcy was discharged within the last 1 to 2 years, it is probably not possible to determine that you and/or your spouse are a satisfactory credit risk unless both of the following requirements are met:
    • you and/or your spouse have reestablished satisfactory credit, and
    • the bankruptcy was caused by circumstances beyond your and/or your spouses control (such as unemployment, medical bills, etc.)
  • If the bankruptcy was discharged within the past 12 months, it will not generally be possible to determine that you and/or your spouse are satisfactory credit risks. – Source

So it appears that if you file a chapter 7 bankruptcy and get straight to work to rebuild your credit you will become eligible for a new VA loan not that far into the future. You can follow this free guide to rebuild your credit after bankruptcy.

You can click here to find a local bankruptcy attorney to discuss your situation with so you can make an educated decision if bankruptcy is right for you.

Please post your responses and follow-up messages to me on this in the comments section below.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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