Does an old bankruptcy matter more than a recent one?

Title: Does an old bankruptcy matter more than a recent one?

Sometimes I wonder if it’s more about the company’s culture than the file itself.

That’s what gets me too. I’ve had files where one lender barely glanced at a seven-year-old bankruptcy, but another grilled me on a five-year-old one like it was yesterday. Is it just random, or do some underwriters have their own “red flag” list? Also, has anyone actually seen written guidelines from lenders that spell this out, or is it all just unwritten rules?

Is it just random, or do some underwriters have their own “red flag” list?

Honestly, I think it’s a mix of both. Some folks just love their checklists, while others seem to go with their gut. I had one lender who acted like my ancient bankruptcy was a distant rumor, but another made me feel like I’d robbed a bank last week. It’s wild how much it varies. Hang in there—sometimes it really is just the luck of the draw.

I get where you’re coming from, but I’d argue it’s not all luck. Lenders have to follow certain rules, even if it feels random sometimes. That said,

“another made me feel like I’d robbed a bank last week”

Honestly, I get the “playbook” thing, but sometimes it’s less about rules and more about how strict the underwriter feels like being that day. I’ve seen folks breeze through with a recent bankruptcy, while someone else gets stuck over something ancient. It’s not always as cut and dry as the guidelines make it seem. That Target card story... yeah, they’ll dig up anything if they want to.

“I’ve seen folks breeze through with a recent bankruptcy, while someone else gets stuck over something ancient.”

That’s definitely been my experience too. The guidelines are there, but underwriters can interpret them pretty differently depending on the day or even their own risk tolerance. I always tell clients to be prepared for inconsistencies, especially with older issues like a long-past bankruptcy. It’s frustrating, but sometimes it really does come down to how much digging they feel like doing. The best you can do is keep your documentation organized and be ready for questions... even about that old Target card from years ago.