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:

• You can refinance with an FHA mortgage one year after filing a Ch. 13 and showing proof that you were paying your Trustee Payments AND Mortgage Payments each month (be careful that you don't confuse being CURRENT with paying ON TIME).

• I am a Mortgage Loan Consultant and I have made it my area of expertise in working with people with bankruptcies, bad credit, and foreclosures. Firstly you do NOT have to wait 2 years to refinance after a chapter 7 discharge, those are for Fannie Mae loans. You can refinance a chapter 7 a day after discharge. A chapter 13 can also be refinanced before discharge since it's on a payment plan for 3-5 years from filing date. You can get a chapter 13 refinance as little as 12 months from filing, not discharge and you can payoff your chapter 13 in the process if you have enough equity in your home. There are major differences between a chapter 13 and chapter 7 refinance but that is for your mortgage broker to be aware of.

• I am a loan agent in California and yes, you can refinance after chapter 13 or during 13 and one day after 13 or 7. A low Fico should be OK. You will need a specialized broker who understands how to do navigate this problem.

• Be careful. Each situation is different in the bankruptcy refi world. People can be refinanced at anytime before, during or after 13 and the day after 7. There is a thing called BK avoidance loans as well.

• I am a Sr. Loan Consultant in NY. There are other contributing factors but you can surely refinance even a day after you file. Your FICO score will determine your eligibility your Loan To Value has to be below 70% though.

• You can refinance after or during a bankruptcy or foreclosure at any time.

• The answer is Yes you can refinance after a bankruptcy. How soon after? This answer depends on the loan company. Some loan products does not allow bankruptcies while there are other products that allow a bankruptcy discharge up to the day prior to funding. Having a bankruptcy within the past 2 years usually means that you will be categorized as a subprime borrower, meaning higher interest rates and higher loan costs. I know this personally because I work for the #1 online mortgage lender in the country. Also, I run two credit related websites that deal with bad credit.

• You can refinance during or after your ch 13 and 7 BK's with a sub prime mortgage lender. I am a sub prime mortgage lender who specializes with people who are in Foreclosure and/or Bankruptcies with low credit scores who have at least 30% equity in their home.

• Yes, if your current bankruptcy attorney is not aware of how to refinance you out of your bankruptcy, talk to another attorney.

• You can ask whatever you want, but they don't necessarily have to tell you the truth. Open Houses are a great way to see a house, not a great way to get info on it. Remember that in most states the real estate agent at an open house works for the seller. Usually you have the right to be represented by your own agent, and that's the person you should direct your questions to. It doesn't cost any more. Your agent has a reason to give you accurate information and help you find a good house.

• First of all, you need to talk to at least 3 mortgage companies BEFORE you start looking for houses to discuss rates and estimated payments. It's always better to have an idea of what you can afford. There are also online payment estimators. In my experience, banks will preapprove you for more than you can really afford once you add in insurance and taxes. While it's fun to go look at million dollar homes, it will do nothing but frustrate you if you can't get a loan for even a quarter million dollar home. Yes, an agent can contact a mortgage company for you. Banks and credit unions usually have lower fees and commissions, though.

• You should ask the sellers any and all questions that you may have regarding the foundation and any problems with the house. Ask about anything that concerns you but remember that unless you put it in writing as part of your offer the answer is not legally binding upon the seller. If the seller completes a seller's property condition report then you should have it written into the offer that the seller's property condition report survives the closing of the purchase & sale.

• Ask the seller: What do you like most about the property and what do you like least about the property? Sellers will almost always lie when responding to this question, and it will give you a feel that there are issues relating to the property that the seller is concealing. Sometimes the seller give you a totally honest answer and even tell you what he or she don't like with the property. TRY to listen carefully to the seller, because sellers like to talk a lot about their property and in the process disclose more information than their broker would like them to.

• Go into all closets and cabinets and look up at the sealing for fresh paint or brown spots, which is evidence of roof leaks. Flush toilets and turn on faucets which will reveal evidence of plumbing or septic issues etc.

• After going through two property buying experiences I discovered that it is pretty difficult to find Realtors and Mortgage Brokers that are truly looking out for your well being 100%. Problems, such as city liens and delinquent personal property tax (missed by a title search) that a Realtor should know and address or informed us about, we found out a month or close to a year after owning the property.

• An open house is more or less for the agent to gather leads. When you are shown a house and it is not YOUR agent be aware as with the above answer that they are not looking out for your best interest. It is always best to find a buyer agent. They will look out for your best interest. They will remember anything you say about how much you are preapproved for.

• DO NOT CALL every agent listed on each house you are interested in looking at. Real Estate agents work on commission only. It is a waste of your time and theirs to come out to show you a house and then you sign with another agent. Yes, the agents are paid after closing, and the check given to their broker for their cut. Many people in the general public don't realize this. Would you want to work for nothing?

• I highly recommend getting a buyer agent to show you any homes you are interested in. They may also help search for homes that fit your needs. The agent will ask you questions, talk with your mortgage company and get the seller's disclosure for you. If you are a first time home buyer, there are many advantages to having someone guide you through it. Once you have an agent and you want to go to an open house, take the opportunity to do it. Be sure you tell the agent holding the open house that you do have an agent and will be calling them if you like it.

• You should find yourself a buyers agent to solely represent your interests, get referrals to 2 or 3 lenders and arrange your loan. Then have your agent search for property that matches the properties in your price range. Alternatively, you can research homes on the Internet for your agent to arrange visits to. It's a good idea to always use your agent to communicate to the sellers agent or to the seller. Don't go to an open house and express your interests to the other agent, they will want you to use their services. And when one agent represents both the buyer and seller there is an obvious fiduciary conflict on who the agent should be more loyal to.

• Although one might be scared by the thought of a fiduciary conflict, the issues of conflict in representing both the seller and buyer on a price negotiation is worse. Also, if you do not have a buyer's agent giving you detailed advice on what has sold in the area in similar properties, you may overpay, not realizing the home is overpriced.

• In Massachusetts, and perhaps other states, the agent holding the open house is working for the seller. If you ask that person to help you with the process and write up the offer, that person is still working for the seller, and is only assisting you with it, but does not represent you. Only if you sign something saying that person is your buyer's agent does that person work for you. In Massachusetts, if they are working for both, they are a dual agent. If the person helping you is a seller's agent, he/she can tell the seller any information about you that you tell, including personal and financial info, and that can be to your disadvantage in negotiations, and that person's purpose is to get the most money out of you to give to the seller. If you already have a buyer's agent and you enter an open house, put your agent's name on the sign in sheet, and perhaps give the agent the card of your buyer's agent. If you wish to make an offer, the seller's agent can then cooperate with your buyer's agent. The commission percentage is decided when the seller lists the property. If the seller's agent also handles the offer, the seller's company gets the whole commission. It is not less because it is handled by one company. If there is a buyer agent, the commission, same amount, gets divided between the two companies.

• I would ask: when was the gas boiler last serviced and has it been regularly serviced tested, if there are trees overhanging the gardens, fences and gates, who is responsible for maintenance and pruning, look at the exterior gutters and fashia boards - when were these painted if at all, how old is the gas fired boiler, and consider if it may need replacing, if there have been replacement double glaze windows, are these still under guarantee.
• The first thing you should ask when you are going to buy your own house or property and also you are just a first time home buyer is about the safety of the place, then next ask if the house already undergone on home inspection, then you need to ask also about the possible calamities that the house already experienced and of course do not forget to ask about the contract and price whenever you are decided to get the place.
• If you are looking at a distressed home (repossessed or short sale) ask for an amount of repair money to be included to cover electrical, water heater, furnace, stove and roof deficiencies. Otherwise once the offer is accepted, you may be in a bind if your mortgage company will not give you a loan if the house has appraisal issues and the bank or FNMA will not repair them. Really, this is not for cosmetic issues, but rather house systems.

Fix Bad Credit

1. DELETE COLLECTION ACCOUNTS

Did you know that paying a collection account can actually reduce your score? Here's why: credit scoring software reviews credit reports for each account's date of last activity to determine the impact it will have on the overall credit score. When payment is made on a collection account, collection agencies update credit bureaus to reflect the account status as "Paid Collection". When this happens, the date of last activity becomes more recent. Since the guideline for credit scoring software is the date of last activity, recent payment on a collection account damages the credit score more severely. This method of credit scoring may seem unfair, but it is something that must be worked around when trying to maximize your score.

How is it possible to pay a collection and maximize your score? The best way to handle this credit scoring dilemma is to contact the collection agency and explain that you are willing to pay off the collection account under the condition that the all reporting is withdrawn from credit bureaus. Request a letter from the collector that explicitly states their agreement to delete the account upon receipt/clearance of your payment. Although not all collection agencies will delete reporting, removing all references to a collection account completely will increase your score and is certainly worth the involved effort.

2. DELETE PAST DUE ACCOUNTS

Within the delinquent accounts on your credit report, there is a column called "Past Due." Credit score software penalizes you for keeping accounts past due, so Past Dues destroy a credit score. If you see an amount in this column, pay the creditor the past due amount reported.

3. DELETE CHARGE OFFS AND LIENS

Charge offs and liens do not affect your credit score when older than 24 months. Therefore, paying an older charge off or a lien will neither help nor damage your credit score. Charge offs and liens within the past 24 months severely damage your credit score. Paying the past due balance, in this case, is very important. In fact, if you have both charged off accounts and collection accounts, but limited funds available, pay the past due balances first, then pay collection agencies that agree to remove all references to credit bureaus second.

4. DELETE LATE PAYMENTS

Contact all creditors that report late payments on your credit and request a good faith adjustment that removes the late payments reported on your account. Be persistent if they refuse to remove the late payments at first, and remind them that you have been a good customer that would deeply appreciate their help. Since most creditors receive calls within a call center, if the representative refuses to make a courtesy adjustment on your account, call back and try again with someone else. Persistence and politeness pays off in this scenario. If you are frustrated, rude, and unclear with your request, you are making it very difficult for them to help you.

5. CHECK YOUR CREDIT LIMIT(S) AND EVENLY DISTRIBUTE BALANCES

Make sure creditors report your credit limits to bureaus. When no limit is reported, credit scoring software scores the account as though your current balance is maxxed out. For example, if you know that you have a $10,000 limit on your credit card, make sure that the limit appears on the credit report. Otherwise, your score will be damaged as severely as if you were carrying a balance of the entire available credit.

Credit scoring software likes to see you carry credit card balances as close to zero as possible. If it is difficult for you to pay down your balances, read the following guidelines to maximize your score as much as possible under the circumstances:

1. There are different degrees that scoring software can impact your score when carrying credit card balances.
2. Balances over 70% of your total credit limit on any card damages your score the most. The next level is 50% of your balance, then 30% of your balance.
3. In order to maximize your score without having to pay down your balances, evenly distribute your credit card balances among all of your credit cards, rather than carry a large balance on one credit card. For example, if you are carrying a $9000 balance on a credit card with a $10000 limit, and you have two other credit cards with a $3000 and $5000 limit, transfer your balances so that you have a $1500 balance on the $3000 limit card, a $2500 balance on the $5000 limit card and a $5000 balance on the $10000 limit card. Evenly distributing your balances will maximize your score.

6. DO NOT CLOSE YOUR CREDIT CARDS

Closing a credit card can hurt your credit score, since doing so affects your debt to available credit ratio. For example, if you owe a total credit card debt of $10,000 and your total credit available is $20,000, you are using 50% of your total credit. If you close a credit card with a $5,000 credit limit, you will reduce your credit available to $15,000 and change your ratio to using 66% of your credit. There are caveats to this rule: if the account was opened within the past two years or if you have over six credit cards.

The magic number of credit card accounts to have in order to maximize your score is between 3 and 5 (although having more will not significantly damage your score). For example, if a card was opened within the past two years and you have over six credit cards, you may close that account. If you have more than six department store cards, close the newest accounts. Otherwise, do not close any at all.

7. BECOME AN AUTHORIZED USER

(Note: Although this tactic is no longer effective for Experian, both Trans Union and Equifax consider authorized user accounts when calculating your credit score.) If you have a short and limited credit history you can ask someone who is a primary account holder to add you to their account as a joint account holder or an authorized user. When added, the primary account holder's credit card will appear on your credit report. Credit scoring software will treat the added account as though it is your account and you will benefit from the low balance and the long payment history for that account. It is important to remember that being an authorized user is helpful for your credit score only if (1) the person is carrying debt below 10% of the credit limit and (2) has had good payment history on the card for seven years or longer. The longer the history, the better. Being an authorized user is potentially detrimental to your credit score if, for example, the primary card holder carries a high balance on the card and has had it less than five years.

8. KEEP YOUR OLD CREDIT CARDS ACTIVE

15% of your credit score is determined by the age of the credit file. Fair Isaac's credit scoring software assumes people who have had credit for a longer time are at less risk of defaulting on payments. Therefore, even if your old credit cards have horrible interest rates, closing those cards will decrease the average length of time you've had credit. Use the old card at least once every six months to avoid the account rating to change to "Inactive." Keeping the card active is as simple as pumping gas or purchasing groceries every few months, then paying the balance down. An inactive account is ignored by Fair Isaac's credit scoring software, so you won't get the benefit of the positive payment history and low balance that card may have. The one thing all credit reports with scores over 800 have in common is a credit card that is twenty years old or older. Hold onto those old cards!

Lenders can require a variety of conditions such as:

• that you live on the property
• that you pay your property taxes to the lender so it can make certain they are paid
• that you not make changes to the title without notifying the lender
• that if you breach your agreement the lender can accelerate the loan payment