The laws of bankruptcy are subject to change.. so it's best to ask a bankruptcy trustee, or a mortgage loan broker.
Here is what I think.
In a 13, (a wage-earner's repayment plan)the homeowner can do many things... with the trustee's approval.. the trustee will generally approve if the refi will benefit the creditors....
Can a homeowner refi during a Chapter 7? A Chapter 7 is less a plan, and more of a liquidation....
I think that if the Homeowner were to keep the house and reaffirm the mortgage... he could refi following discharge.
In chapter 7 it needs to be discharged and completed. You can refinance at that point but you will not be able to get a great rate.
Chapter thirteen is more difficult as the debt is still owed and creditors are still waiting. It can be done but again you will have only a few options
the "key" is the trustee "MUST" approve. if you don't contact the trustee they will put you in a world of hurt. they like to use the word "fraud" and "criminal charges". they can be hard to deal with. as long as they are aware of whats going on....kenmax
certainly a low LTV, and documentation that the financial hardship (proximate cause for BNK) has been resolved, and the refi would help to improve the overall financial situation...
the lender might also seek a co-borrower.
[addsig]
so when a chapter 7 is all done and over with you can refinance at that point??? Can your house actually enter forclouser and then claim bankruptcy and refinance it. Or do you need to do this before forclouser???? thanks so much guys this information would be very valuble to me.
The laws of bankruptcy are subject to change.. so it's best to ask a bankruptcy trustee, or a mortgage loan broker.
Here is what I think.
In a 13, (a wage-earner's repayment plan)the homeowner can do many things... with the trustee's approval.. the trustee will generally approve if the refi will benefit the creditors....
Can a homeowner refi during a Chapter 7? A Chapter 7 is less a plan, and more of a liquidation....
I think that if the Homeowner were to keep the house and reaffirm the mortgage... he could refi following discharge.
In chapter 7 it needs to be discharged and completed. You can refinance at that point but you will not be able to get a great rate.
Chapter thirteen is more difficult as the debt is still owed and creditors are still waiting. It can be done but again you will have only a few options
the "key" is the trustee "MUST" approve. if you don't contact the trustee they will put you in a world of hurt. they like to use the word "fraud" and "criminal charges". they can be hard to deal with. as long as they are aware of whats going on....kenmax
Thanks for the info. I am trying to learn more about bankruptcy, but it is still no clicking with me.
Now from the mortgage point of view - can a person in chapter 13 refinance?
Brenda
In a word... YES, with bankruptcy trustee's approval. The homeowner must ask and get permission from the bankruptcy trustee.
Guess my question is, what would a lender look as the requirements to refinance a person in bankruptcy?
Equity
Length of time since the filing
Reason for - medical bills vs credit card bills
Etc
certainly a low LTV, and documentation that the financial hardship (proximate cause for BNK) has been resolved, and the refi would help to improve the overall financial situation...
the lender might also seek a co-borrower.
[addsig]
so when a chapter 7 is all done and over with you can refinance at that point??? Can your house actually enter forclouser and then claim bankruptcy and refinance it. Or do you need to do this before forclouser???? thanks so much guys this information would be very valuble to me.
I'm kinda thinking that after the Chapter 7... since it is a liquidation oriented chapter, you won't have the house anymore.
You really need to understand the different Chapters of Bankruptcy, and how bankruptcy impacts continued homeownership.
[addsig]