Process · 5 min read
Will collections or a bankruptcy stop me from getting a mortgage?
August 20, 2026 · Written by Bill Egan, NMLS 7342
Short answer
Not always. On a regular Fannie Mae loan, a Chapter 7 bankruptcy generally needs four years from discharge or dismissal. Chapter 13 is often two years from discharge, or four years from dismissal. Some collections must be paid; some files can leave small ones alone. FHA and VA have their own clocks. Egan Financial Group LLC reads the dates on your report before you shop, not a scare headline.
01
Why this comes up
You have an old collection or a bankruptcy on the report. A friend said you have to wait seven years. Another said FHA will do it tomorrow. You do not want to look at houses on a rumor, and you do not want to be embarrassed at the first lender meeting.
02
Where this goes wrong
You write an offer on a timeline the waiting period does not support. Or you pay a collection with a large cash withdrawal and create a new large-deposit problem. Or you leave the bankruptcy off the application and the credit report shows it anyway. Hiding it is a bigger problem than the bankruptcy itself, and it can kill the file after earnest money is in.
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What we do about it
We pull credit and read the dates before you shop. We will tell you the waiting period for the program you actually qualify for, not a story. Egan Financial Group LLC will not send you under contract three months too early.
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How to get ready
Bring the discharge papers and a current credit report if you have one. Do not pay collections in cash the week you apply without a trail. Disclose the bankruptcy on the application. On-time cards and no new late payments since then matter as much as the calendar.