Even though bankruptcy has many financial impacts, it surely doesn’t suggest the end of the world. Many individuals file for bankruptcy for a number of reasons, and this figure only increases with the harsh economic conditions that we encounter today. According to statistics from the Australian Financial Security Authority (AFSA), there were 7,466 episodes of bankruptcy in Australia in the September 2014 quarter alone. Finding bankruptcy advice is critical so you become mindful of exactly what happens financially when you declare bankruptcy.

There are two categories of bankruptcy: undischarged bankruptcy and discharged bankruptcy. Undischarged bankruptcy implies that you’re still in the process of bankruptcy and are unable to acquire any type of loan. Discharged bankruptcy signifies that you are no longer bankrupt, and can secure a loan with several specialist lenders. Bankruptcy ordinarily lasts for three years however can be extended in some circumstances.

Sadly, the banks don’t provide the reasons for your bankruptcy and this can make it very difficult to get a home loan approved when you’re eventually discharged. Whether you’ll be capable to buy a home after bankruptcy depends on various factors, including the type of loan you’re after and how you manage your credit rating once declared bankrupt. What is clear is that your spending capacity will be restricted, and repossession of property is typical.

Can you get a home loan approved after bankruptcy?

There are a variety of specialist lenders supplying home loans to customers that have been discharged from bankruptcy for only one day. Although the majority of these loans feature a higher interest rate and charges, they are still an option for individuals that are serious. Much of the time, a larger deposit is needed and there are more stringent terms and conditions compared to regular home loans.

There are plenty of differences amongst lenders for discharged bankruptcy loan approvals. A few lenders will even supply reduced rates to those people whose finances are in good condition and who have good rental history, if relevant. The length of time between your discharge and loan application will similarly affect the result of your application. Two years is commonly advised. Equally, sustaining a stable income and employment are also components which will be taken note of. Many bankrupt people will also make an effort to try to bolster their credit rating promptly to lower the strain of bankruptcy once discharged.

Points to consider when applying for a home loan once discharged.

Picking out an appropriate lender is key, so it’s a good idea to select a lender that not only offers loans to discharged bankrupts but one that is prominent and reputable. By doing this, you’ll feel confident that you’re securing reasonable terms and conditions and your application is more likely to be approved. There are several unreliable lenders on the market that exploit the financially vulnerable, so please beware. Another significant variable to take into account is that you should not apply to more than one lender at a time. Every loan application surfaces on your credit history, and several applications at the same time are seen negatively by lenders.

Pros and cons of home loans for discharged bankrupts


You can still a loan. Though it may be complicated, it is still feasible for discharged bankrupts to get a home loan approved.

The longer you have been discharged, the easier it gets. Spending time restoring your finances demonstrates to the lenders that you’re financially responsible.

Your credit rating will improve. Practical tasks such as paying your bills on time and producing steady income will improve your credit rating.


You cannot receive a loan until you are discharged. A lot of lenders will not approve any loans to individuals that are undischarged to avoid endangering any further financial distress.

Increased rates and fees. Typically, interest rates and fees will be increased for discharged bankruptcy loans. You can only acquire lower interest rates with a bigger deposit.

Record of bankruptcy. You will have a record of bankruptcy on your credit history for seven years after discharge, and your name will always be on the National Personal Insolvency Index (NPII).

Bankruptcy is never a pleasant experience, but it does not imply that you’ll never own a home again. As a result of the intricacy of bankruptcy, it’s crucial to seek professional advice from the experts to guarantee you understand the process and therefore make wise financial decisions. For more information or to talk to someone about your situation, contact Bankruptcy Experts Rockingham on 1300 795 575 or visit http://www.bankruptcyexpertsrockingham.com.au