Looking for a mortgage after bankruptcy? You have options.

woman 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.

Australia map

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.

Bankruptcy on credit report

How long does bankruptcy stay on your credit report?

Bankruptcy stays on your credit report for at least two years after you’re discharged. This means that including the three years you’re declared bankrupt, it’ll be on your credit report for a minimum of five years.


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 are options available to help get your finances back on track:

Speak with your Trustee in Bankruptcy.
Speak with your Trustee in Bankruptcy
Avoid applying for loans until your bankruptcy is discharged
Avoid applying for loans until your bankruptcy is discharged
Sticking to a strict budget
Get into the routine of sticking to a strict budget

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.


Apply for a Pepper Money Home Loan

Want to find out where you stand?

We've got the online tools and calculators to help get your home loan journey underway. Work out how much you may be able to borrow and even quickly find out what indicative interest rate you might be eligible for.

Information provided is factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser.

All applications are subject to credit assessment, eligibility criteria and lending limits. Terms, conditions, fees and charges apply. 

The results of the borrowing power calculator are based on information you have provided and is to be used as a guide only. The output of the calculator is subject to the assumptions provided in the calculator (see 'about this calculator') and are subject to change. It does not constitute a quote, pre-qualification, approval for credit or an offer for credit and you should not enter commitments based on it. The interest rates do not reflect true interest rates and the formula used for the purpose of calculating estimated borrowing power is based on the assumption that interest rates remain constant for the chosen loan term. Your borrowing power amount will be different if a full application is submitted and we complete responsible lending assessment. The results in the calculator do not take into account loan setup or establishment fees nor government, statutory or lenders fees, which may be applicable from time to time. Calculator by Widgetworks.

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