How Hard is it to Get a Mortgage After Bankruptcy?

Bankruptcy can be a difficult phase in anyone’s life. However, it’s not the end of the road. Life goes on, and so do your dreams of owning a home. You might ask, “how hard is it to get a mortgage after bankruptcy?” This comprehensive guide will provide you with essential knowledge about the potential challenges and opportunities you may face when seeking a mortgage post-bankruptcy.

Understanding Bankruptcy

Before diving into the core issue, let’s first understand what bankruptcy is. Bankruptcy is a legal procedure that enables individuals or businesses unable to pay their debts to seek relief from some or all of their debts. In Canada, the process is governed by the Bankruptcy and Insolvency Act.

The Effect of Bankruptcy on Your Credit Score

Filing for bankruptcy can significantly impact your credit score, making it challenging to secure a mortgage. A bankruptcy record can stay on your credit report for up to seven years, during which it may affect your ability to get new credit, including a mortgage.

The Role of Trustees in Bankruptcy

Trustees play a crucial role in the bankruptcy process. They are licensed by the federal Office of the Superintendent of Bankruptcy (OSB) to manage the bankruptcy process on behalf of the debtor. Their responsibilities include selling the debtor’s assets to pay creditors and overseeing the debtor’s discharge from bankruptcy.

Retaining Your Home and Mortgage During Bankruptcy

Contrary to popular belief, bankruptcy does not always mean losing your home. The fate of your home in bankruptcy largely depends on the equity in your property. If there’s no significant equity, the trustee might allow you to keep the home, provided you continue making mortgage payments.

Mortgage Renewal Post-Bankruptcy

When it comes to renewing your mortgage after bankruptcy, most banks would rather have you continue making payments than foreclose on the home and potentially lose money. Consequently, you should be able to renew your mortgage provided your payments are up-to-date.

Buying a New Home Post-Bankruptcy

The possibility of buying a new home after bankruptcy largely depends on how well you’ve managed your finances post-bankruptcy. Once discharged from bankruptcy, you should focus on rebuilding your credit. The Canada Mortgage and Housing Corp. might consider your mortgage application as early as 18 months to 2 years post-discharge, provided you’ve re-established your credit.

Steps to Improve Your Chances of Getting a Mortgage Post-Bankruptcy

  1. Rebuild Your Credit: Start by obtaining a secured credit card and using it responsibly to rebuild your credit history.
  2. Save for a Down Payment: A substantial down payment can improve your chances of securing a mortgage.
  3. Stable Employment: Lenders prefer borrowers with a steady income.

Licensed Trustees Across Canada

Whether you’re in Alberta, BC, Ontario, or any other province, a Licensed Trustee can guide you through the bankruptcy process and beyond.


While bankruptcy can pose significant challenges, it’s not an impassable hurdle. With patience, financial discipline, and guidance from professionals, securing a mortgage after bankruptcy is achievable.

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