Q: My fiance may need to file for bankruptcy, and she's afraid we will not be able to get a mortgage for a house we want to buy. How long after bankruptcy--if ever--can you get approved for a mortgage, assuming you're applying with a partner who has had good solid credit over many years?
-Brian Brenlove, Alexandria, Virginia

A: Don't worry. When the wedding bells ring, it won't mean the end of your dreams to buy a house. Though the bankruptcy won't be eliminated from your fiance's records for 10 years, you needn't wait that long to secure a mortgage.

Charles Juntikka, a New York City bankruptcy lawyer, says the typical delay is 3 to 4 years, and that he has clients who have been able to get mortgages after just two years.

To speed up the process, your fiance should apply right away for one or two secured credit cards to start rebuilding her credit history. (For lists of secured credit-cards, visit CardTrak.com.) She won't really need to prove that she can handle big debts--better to show usage and that she can pay bills on time. (For more information on improving credit, visit myvesta.org.)

Ironically, formerly bankrupt consumers can be seen as good credit risks. Bankruptcy is a good teacher, and it's no fun, so victims tend to be reformed borrowers, according to Juntikka. You might initially have to pay higher interest rates than borrowers with sparkling credit histories, but if you both have good jobs and maintain perfect payment records, you should be able to secure lower rates after a few years.

There's one other option to consider: You could try to buy the house in your name alone. That way, no one needs to look at your fiance's records.
--Reported by Judy Feldman

http://cjalaw.com/rebuild_credit.html