Looking for a mortgage after bankruptcy?
Estimated read time: 3 Minutes
If you’ve ever had to go through bankruptcy, you’ll know how challenging it can be.
Recovering can be a long and difficult process, but once your bankruptcy period is over you can start to focus on getting your finances in order.
How long does bankruptcy last in Australia?
Bankruptcy typically lasts for three years. If you voluntarily apply for bankruptcy, it’ll end three years and one day from the date the Australian Financial Security Authority (AFSA) accepts your application. If a creditor has applied to the courts to have you declared bankrupt, it will end three years and one day from the date the AFSA receives your statement of affairs.
After this time has passed, you will be discharged from bankruptcy and can start focusing on getting your credit back on track.
How long does bankruptcy stay on your credit report?
What is bankruptcy?
Bankruptcy happens when someone (either an individual or a company) is unable to repay their debts, and can affect anyone regardless of age, income, gender or occupation. Often unforeseen circumstances like unemployment, redundancy or an uninsured loss can all have a serious effect on your financial situation.
What happens if you become bankrupt? If you find yourself in a situation where you are no longer able to pay your debts, declaring bankruptcy voluntarily, could be an option. Alternatively, legal proceedings could be taken against an individual or a company by a creditor in the hopes of recouping the money owed.
You can find more information on applying and how it works from the Australian Financial Services Authority.
Tips on how to recover from bankruptcy
If you've been declared bankrupt, there could be options available to help get your finances back on track:
Once your bankruptcy has been discharged, you could start restoring your financial standing.
Some lenders can be uneasy about borrowers who’ve previously been declared bankrupt, so applicants may have had their loan application declined. However, it’s important to understand that just because you have been declared bankrupt, there could still be options out there for people with unique financial situations.
When can you get a home loan after bankruptcy?
If you've been officially discharged (by more than 1 day) or entered into a debt agreement, there are several home loan options that might suit you. Some non-bank lenders, like Pepper Money may be able to assist with finalising a debt agreement or structuring debt consolidation into your home loan through refinancing.
How can Pepper Money help with a mortgage after bankruptcy?
As a non-bank lender, we look at things differently. We don’t see your bankruptcy as something that should hold you back. We understand that real life happens and sometimes circumstances beyond your control can lead to a default, leaving you with an impaired credit history. We’ll talk with you to learn more about your individual situation.
Discharged from bankruptcy or experienced credit impairment?
We’ll look to understand your situation in more detail. We’ll ask how any credit issues came about and what’s happened since. If you’re able to show us that you’ve been in stable employment with a reliable income and regular savings, we may be able to help find a mortgage that works for you.
Whatever your situation, if you’re looking to get a mortgage after bankruptcy, then start by talking with one of our lending specialists on 137 377 or enquire online. We’re here to help.
Contributor | Neil Culkin, Head of Credit and Settlements
Neil has a 20-year career in credit provision. At Pepper Money, he oversees the underwriting and credit control of all consumer finance loan applications. He is also responsible for updating lending policies and guidelines. Read more.
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Resources to help with credit issues
It can be tough to recover from a credit event. We've put some resources together to help you get back on-track.
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