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Last month the Chicago Tribune featured an article “Getting a Mortgage after Bankruptcy or Foreclosure.” It presented some useful information about how the housing recession has affected people that want to apply for a mortgage.

Many people who lost their home during the housing recession believe that they have lost their ability to qualify for another mortgage,  but that may not be the case.

While negative marks on your credit record, like bankruptcy and foreclosure, used to mean that you could not gain financing to buy another house for seven years, the wait is now generally only three years and maybe even less depending on the circumstances. For example,  if your problems are cited as a result of “extenuating circumstances” that you had no control over, then you could qualify for a mortgage in as little as 24 months.

So what could these reasons be? A serious life event, such as job loss, serious illness, and death of a wage earner can be considered as extenuating circumstances. However, a divorce or business failure would not meet the criteria.

In any case, it’s important for people to maintain solid credit history, especially if you are trying to prove that you have learned from your mistakes. Pay your bills on time and manage your finances wisely. If you’ll be applying for a loan, you’ll need proof that you have made smart financial decisions. The article cites Freddie Mac as an example.

Here’s what Freddie Mac’s guidelines say when the borrower’s financial issues were due to his mismanagement: An acceptable credit reputation must be re-established for at least 84 months if he was foreclosed upon, 60 months if he filed more than one bankruptcy petition in the past seven years, 48 months after the discharge or dismissal of a Chapter 7 bankruptcy, and 48 months after conveyance of a deed in lieu of foreclosure or a short payoff related to a delinquent mortgage.

When it comes to bankruptcy, the wait can also depend on what type you filed, with Chapter 7 requiring a longer wait than Chapter 13.

For more information on bankruptcy law, visit Luongo Bellwoar.