Many people who have filed bankruptcy know little about the process. Often times debtors are unaware of their options in a chapter 13 because they rely on their attorney; their attorney has a fiduciary relationship with the debtor. A bankruptcy attorney's job is to know bankruptcy law, not the mortgage business or their guidelines. When a debtor files a BK 13 their main concern is having an automatic stay placed on a mortgage, collection, etc. To save their home from foreclosure. When entering into a plan the debtor, usually has no exit plan other than paying the 5 or 3 year plan (contingent upon median income). The debtor can refinance after 36 months (all unsecured claims become dis-chargeable debt) and discharge the bankruptcy immediately. This saves the borrower 2 years on their credit report. After refinancing, the BK 6 months out/discharged Fannie Mae will issue approvals. A bankrupt borrower can easily be transformed to an AA+ 680-720 FICO borrower yielding rates in the range of 6.25-7.00 after doing a loan to discharge the bankruptcy.
In a dismissed bankruptcy a foreclosure bailout out loan can be arranged. This topic was discussed in a previous article I published in ezinearticles.com When a debtor is dismissed from his/her bankruptcy the mortgage ALONE can be refinanced and a Chapter 7 can be employed. When filing a Chapter 7 the mortgage must be refinanced first. I arrange foreclosure bailouts for people more frequently than previous years. When trustee or mortgage payments are missed the bank will make a motion to lift the automatic stay. This leaves the borrower exposed to foreclosure until the mortgage is refinanced. If the borrower meets the means test the non mortgage/secured debts can be discharged under a Chapter 7 Bankruptcy. The "means test" is when the court determines a debtors filing to be abuse of the system. Abuse is presumed if the aggregate current monthly income over 5 years, net of certain statutorily allowed expenses is more than $10K or is 25% of the debtors unsecured debts, as long as the amount is $6,000. The debtor can rebut this guideline with mitigating circumstances. A dismissal from a bankruptcy has been viewed by the court as mitigating circumstances.
When the payments to your trustee are not perfect you can still get out of your bankruptcy. If the debtor has filed multiple Bankruptcies it is important for debtor to know what claims are listed in schedule D & F (secured and unsecured claims) Often times when multiple liens are present the attorney will file an avoidance on a lien. This means the borrower is not required to pay the lien back. However, all too often title searches find liens that were never discussed or filed. Liens that maybe very old.
An unscheduled debt most of the time will not be discharged with a BK payoff because the claim was omitted or an avoidance was never filed. This is a common omission/oversight that can (depending on the amount of the claim) present a problem for a borrower who may not have enough equity to cover the lien.This is where having a through attorney pays off, you most likely wont have to deal with this predicament. Often times I can negotiate these debts down if they are addressed ahead of time.
Yes. You may have trouble finding a lender, but it is possible. If you refinance before your 37th month of bankruptcy, then you will be responsible for repaying the unsecured debt that you filed for. If you can hold out till the 37th month you can refinance and not be held responsible for that back debt. You can have the lender refinance all of your current debt, this includes your filed bankruptcy that your currently paying on through your trustee and the unsecured debt that you had discharged as well as new debt. (This advice was given by a lawyer that cleared one user's Chapter 13.)
Here is more input and advice from others:
Do you have a bankruptcy on your record? If so, you might think it’ll be impossible for you to refinance your mortgage. True, a bankruptcy will make it more difficult, but not out of the question
We’ll take a look at how to refinance a home loan after a bankruptcy. We’ll cover how the different types of bankruptcies affect your ability to refinance as well as some other factors you’ll need to consider. Finally, we’ll show you the steps you’ll need to take to refinance after a bankruptcy.
You can legally refinance if you choose to, there are no restrictions from the bankruptcy. With that, you may find that lenders will not approve your loan because of the bankruptcy.
If a financial institution is willing to do so, but that depends on them knowing if you are filing bankruptcy or not. If they know, then your chances of a refinance are slim to nil.
"It is possible to refinance after filing for bankruptcy. However, there must be a certain interval of time between refinancing and filing for bankruptcy that varies depending on the country you are filing in."
You can refinance your mortgage, even after a bankruptcy. Refinancing can even help restore your good credit in about two years! Sit down with your lender and talk about a refinancing plan.
One can find a guide on how to refinance a home after a Chapter 13 bankruptcy on various websites like Homeguides and wikiHow. Both websites offer a great amount of information about all kinds of things, including bankruptcy.
You may refinance any time that the refinance improves your financial situation. If you are interested in a no obligation - free detailed analysis - of your situation, please contact me. I am an FHA specialist.
Here is the short answer.........No. No lender will allow this. Lenders want you to be out of Bankruptcy.This is what I do refinance people out of bankruptcy early or arrange refinancing so that my clients can avoid bankruptcy or forclosure altogether. that is what you must do in order to refi your mortgage regardless of the mortgage status with your bankruptcy plan
A person can refinance during bankruptcy by checking ones credit rate and talking with their attorney. Refinancing is not always possible and depends on the individuals circumstance and this course of action often damages the individuals credit rate.
If you own a home and you have made your payments on time to the bankruptcy trustee, you may be able to complete your bankruptcy very quickly. There are several thinks that must be considered. It is very important that you work with a Mortgage Lender who has a lot of experience in this type of refinance. If you have equity in your home you may be able to do a cashout refinance of the home and use the cash you take out to pay off the bankruptcy. This will require the approval of the bankruptcy trustee. Normally the best option for someone who wishes to do a cashout transaction is an FHA loan. You can get an interest rate that is aggressive and you will not have a prepayment penalty. Another factor is how long you have been in the bankruptcy.
While participating in a Chapter 13 bankruptcy, no major financial transactions are allowed w/o the permisson of the bankruptcy trustee.
Bankruptcy refinance helps homeowners who had bankruptcy or other credit matters get a home loan to find a payment assistance, and helps restore their credit while also achieving their financial security.
You would probably be better off refinancing your mortgage first and then applying for bankruptcy later on. My mom had to file for bankruptcy due to credit card debt she could not pay.
You can refinance even a day out of bankruptcy. Every situation is different but the main criteria are the type of bankruptcy, your credit score, amount of equity available, how you've paid your bills since the bankruptcy and time in bankruptcy.
You can quite possibly refinance up to 80 percent of the value of your home and get some cashout with a decent rate.
All you have to do is submit a request to refinance to the trustee. The lawyer stands nothing to gain. They would rather you refinance because they know they will get their money.
You can refi a day out discharging of bankruptcy depending on the situation.
While participating in a chapter 13 the petitioner cannot refinance, sell, transfer or otherwise real property without receiving permission from the bankruptcy court/trustee to take the action. Therefore the issues cited are not relevant until/unless permission is granted.
There are a number of institutions that offer information and aid in refinancing with bankruptcy. A local bank or credit union can offer assistance, as well as a number of online sources, such as FHA and Discover.
* The usual length of time after a bk dismissal required to refinance is 24 months. There are different requirements with different lenders. Some specialize in assisting borrowers with bks. * It depends on the type of Bankruptcy you filed....Chapter 7 or 13. I have lendors that will offer financing one day out of a Chapter 13.
If you own a home and you have made your payments on time to the bankruptcy trustee, you may be able to complete your bankruptcy very quickly. There are several thinks that must be considered. It is very important that you work with a Mortgage Lender who has a lot of experience in this type of refinance. If you have equity in your home you may be able to do a cashout refinance of the home and use the cash you take out to pay off the bankruptcy. Normally the best option for someone who wishes to do a cashout transaction is an FHA loan. You can get an interest rate that is aggressive and you will not have a prepayment penalty. Another factor is how long you have been in the bankruptcy.
No, you can't borrow any more $$$$ while you are in bankruptcy. Even on an existing loan. It is against the law.
Yes, permission from the bankruptcy trustee/court is needed for any major financial transaction while participating in a chapter 13.
I f that was the main reason for filing the c. 13, you can. Make sure the lender knows about the bankruptcy and you have a refi commitment before you move to dismiss.
If the party involved is participating in a Chapt. 13 filing; no major financial transactions can be made without the approval of the bankruptcy trustee. If the Chapt.7 has been discharged in most cases there will be no restrictions to refinancing, except it is doubtful a lender would be found.
There is no law against it but you might have trouble finding a lending institution that will work with you.