A past credit event is one of the most common reasons people assume they cannot buy a house, and one of the most common reasons people apply too soon. Both mistakes usually come from a number of years someone heard secondhand. The real answer comes from the program's current guideline, the exact type of event, and the date the guideline measures from.
This article does not print waiting periods. They differ between FHA, VA, USDA, conventional, and non-QM programs, they differ by type of event, and they change when the handbooks change. A wrong number either keeps someone renting longer than they needed to or gets them under contract on a house the loan cannot close. Bring the discharge papers and the credit report, and the current guide can be read against them. For how bankruptcy timing works on each program, see our approved page on a mortgage after bankruptcy.
For any significant past event, the underwriter works through the same questions:
1. What kind of event was it? A Chapter 7 bankruptcy, a Chapter 13, a foreclosure, a deed-in-lieu, a short sale, a charge-off, or a collection are each treated differently. 2. What is the date the guideline measures from? That might be a discharge date, a dismissal date, a foreclosure sale date, a deed recording date, or the date a short sale closed. 3. Has the waiting period for this program passed as of the date the guideline names, usually the application or the note date? 4. If the period has not passed, does the program allow a shorter period for documented extenuating circumstances, and do the facts qualify? 5. What has your credit looked like since the event?
The answers come from documents. The credit report shows how the bureaus recorded the event. The court record, the trustee's records, the deed, or the settlement statement shows the official dates. When those dates disagree, the underwriter uses the date the guideline names, and asks for the document that proves it.
A Chapter 7 bankruptcy is a liquidation. Eligible debts are discharged, usually within months of filing. Waiting periods for Chapter 7 are typically measured from the discharge date or the dismissal date, as the guide states.
A Chapter 13 bankruptcy is a repayment plan that runs for several years under a trustee. Some programs will consider a borrower who is still in the plan, with a documented history of plan payments and written permission from the trustee or the court to take on the new mortgage. Others want the plan completed and measure from the discharge or dismissal.
Discharged and dismissed are different outcomes. A discharge means the court released the debts. A dismissal means the case ended without a discharge, and the debts are generally still owed. Some programs treat the two differently, and a dismissed case can leave old accounts active on the report.
Bring the complete bankruptcy papers: the petition with the schedules of debts, the discharge or dismissal order, and for a Chapter 13, the trustee's payment history. The underwriter checks that debts listed in the bankruptcy show as included in bankruptcy on the report, and that nothing new was missed.
A foreclosure is measured most often from the completion date, which in Texas usually means the date of the trustee's sale under the deed of trust. Texas foreclosures are typically nonjudicial and happen at the county courthouse on the first Tuesday of the month, so the sale date is a specific, recorded event.
A deed-in-lieu, where the owner signs the house back to the lender, and a short sale, where the house sold for less than the loan with the lender's approval, are separate events with their own waiting periods on some programs. The completion date of the deed transfer or the short sale closing is usually what counts.
When a mortgage was included in a bankruptcy and the house was later foreclosed, the guideline may measure from either event, depending on the program and the documents. This is one of the places where a careful read of the paper matters.
Some programs allow a shorter waiting period when the event was caused by something outside your control that was not expected to recur, like the death of a primary wage earner, a serious illness, or a sudden loss of income for reasons beyond your control. The underwriter needs a letter explaining what happened and documents that prove it, like a death certificate, medical records, or a layoff notice, plus evidence that the event caused the financial trouble.
Taking on too much debt, a divorce on its own, or a change in the market usually do not qualify under agency definitions. Each guide defines its own list, and the underwriter decides whether the facts fit. This article will not coach anyone to relabel the cause.
Collections and charge-offs are treated very differently from bankruptcy and foreclosure, and very differently between programs.
Depending on the program and the findings, an unpaid collection might be ignored, might need to be paid before closing, or might be counted in the debt ratio at a calculated payment even though you are not making payments on it. Some programs look at the total of non-medical collections against a threshold. Some exempt medical collections entirely. The method is the program's rule.
Medical debt reporting has also changed. The three national credit bureaus changed their policies in recent years so that paid medical collections and some smaller medical collections no longer appear on reports. What remains on the report is what the underwriter sees.
Paying an old collection deserves a pause before it happens. On some scoring models, paying a collection updates the date of last activity on the account, and that can lower the score for a time. Paying it might still be required or still be the right choice. Talk to the loan officer before paying a stack of old collections in the week of the application, so the payoff happens in the order and form the file needs. If you pay one, get a letter from the collector showing the account is paid or settled.
A paid collection can stay on the report as paid. Paid and gone are different. The underwriter may still ask about it.
When a borrower disputes an account with the bureaus, the report marks it as disputed. Some automated underwriting systems will not issue findings with certain disputes on the report, or will ignore the disputed account in a way the lender has to double check. The lender may ask you to resolve or withdraw the dispute.
A dispute on an account that is genuinely wrong should stay until the bureau corrects it. A dispute on a true account, filed to improve a score, can hold up the loan and may have to come off. Tell the loan officer which kind it is.
Meeting the waiting period gets the file in the door. The underwriter still reads everything that came after. Re-established credit, on-time payments on rent and car loans, and no new collections are what the guideline and the findings look for. New late payments after a bankruptcy often weigh more than the bankruptcy itself. Income still has to be documented, and the ratio still has to work.
Fictional example: a Fort Worth buyer says the foreclosure was about four years ago. The credit report shows one date. The county record shows the trustee's deed recorded on another date. The guideline counts one of those dates, and the file uses that one, regardless of memory. If the waiting period is not met on this program, the loan waits, or a different program is checked against its own period. Nobody should invent a shorter period to be kind.
Some private investors write non-QM loans with shorter waiting periods or different treatment of past events. They come with their own requirements for credit, down payment, and reserves, written in that investor's guide. Requirements vary by investor and loan structure. This is educational information only, not an offer of a non-QM loan. They are worth knowing about when the timing matters, and worth comparing to waiting for a standard program.
This page explains how a mortgage file reviews a past event. It is not legal advice. Questions about whether to file bankruptcy, which chapter fits, or what a court order means belong with a bankruptcy attorney. The federal courts publish a plain overview in Bankruptcy Basics.
For collections specifically, see buying a house with collections. When you are asked to explain an event, see letters of explanation, and if the automated system refers the file, manual underwriting.
If you have a past credit event and want to know where you stand today, bring the court or deed documents and your credit report, and I will read them against the current guides with you. Book a call, or start an application.
Links checked Oct 21, 2026.
About the author: McKade Lively, NMLS 2704474, American Pacific Mortgage Corporation dba True North Home Loans, NMLS 1850.
Equal Housing Opportunity.
Last reviewed: Oct 2026