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Mbanc NMLS #38232 | Equal Housing Opportunity Lender

How Bankruptcy Affects Bank Statement Loan Eligibility

Bankruptcy does not permanently disqualify you from a mortgage. It creates a seasoning requirement — a waiting period from the discharge date before you can qualify. For Mbanc’s bank statement loan programs, that waiting period is 36 months.

This applies to all major credit events: Chapter 7 bankruptcy, Chapter 13 bankruptcy, foreclosure, short sale, deed-in-lieu of foreclosure, pre-foreclosure, and mortgage charge-off. All require 36 months seasoning for full program access.

A forbearance, modification, or deferral must be more than 12 months in the past.

What “Seasoning” Means

Seasoning is measured from the discharge date — not the filing date — for bankruptcy. For foreclosure, it’s measured from the transfer of title or sheriff’s sale completion. The 36-month clock starts from the event resolution, not the event initiation.

Example: Bankruptcy discharged on January 1, 2022. As of February 1, 2026, you have 37 months of seasoning — eligible under Mbanc’s standard program.

What You Need After Bankruptcy to Qualify

The seasoning clock is necessary but not sufficient. You also need:

– Minimum 640 credit score — rebuilt after the credit event
– Clean housing history: maximum 1x30x12 since discharge
– 2 years of documented self-employment with consistent deposit history
– 15% minimum down payment (85% max LTV)
– Adequate reserves per LTV tier
– Strong bank statement income supporting DTI at or below 50%

The most important thing to do during the seasoning period is rebuild. Open two to three new credit accounts after discharge, use them responsibly, and let the account history age. Most borrowers who are diligent about credit rebuilding achieve 640+ within 18–24 months post-discharge.

Reduced-Program Access With Less Seasoning

Some program tiers offer limited access with 24 months of seasoning:
– Maximum LTV is reduced (approximately 70–75% on primary residence)
– Maximum loan amount is capped at $1,500,000
– Program pricing reflects the shorter seasoning period

Full program access — including 85% LTV and up to $4,000,000 — requires the standard 36-month seasoning.

Chapter 7 vs Chapter 13 — Does It Matter?

Both Chapter 7 and Chapter 13 bankruptcies are treated the same under Mbanc’s 36-month seasoning requirement. Chapter 13 involves a repayment plan over 3–5 years; if you complete your plan and receive a discharge, the 36-month clock starts from that discharge date, not from the filing date.

Frequently Asked Questions

How long after bankruptcy can I get a bank statement loan?

Mbanc requires 36 months of seasoning after the discharge date for standard full-program access. Some reduced-LTV access may be available at 24 months.

Does the bankruptcy need to be discharged or just filed?

Discharged. The 36-month seasoning period begins on the discharge date, not the filing date.

What credit score do I need after bankruptcy for a bank statement loan?

Minimum 640. Most borrowers who rebuild credit actively achieve this within 18–24 months post-discharge. A 680+ score accessed 36 months after discharge is a realistic and achievable target.

Can I qualify if I had a bankruptcy AND a foreclosure?

Yes, provided both events have been seasoned 36 months individually. If one event is seasoned and the other is not, the most recent event controls eligibility.

I had a COVID forbearance, not a bankruptcy. Does that count?

COVID-era forbearances and modifications must be more than 12 months in the past — not 36 months. The 36-month seasoning requirement applies specifically to bankruptcy, foreclosure, short sale, deed-in-lieu, and similar credit events.

About the Author

Mayer Dallal is the Managing Director of Mbanc (Mortgage Bank of California, NMLS #38232), a consumer-direct Non-QM lender specializing in bank statement loans, DSCR loans, and asset utilization programs for self-employed borrowers and real estate investors. Mbanc is licensed in 22 states for primary residence lending plus an additional 24 states and Washington DC for non-owner-occupied investment property financing under the business-purpose exemption.

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Mbanc NMLS #38232 | Equal Housing Opportunity Lender

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