2nd home refi before ch 7

[Dollar Bill]

Okay.....I plan to buy a home in CALI before I file ch 7. I have a 2nd home in TX I use as rental, and another that will sell in a few weeks.

My plan is to use the money for the home I sell in a few weeks as a down on the home in CALI. I also wanted to sell my other home which I have tried to sell for 8 months with no bites. The market is bare in TX right now.

Question is....will it be considered BK fraud if I refinanced the home that hasn't sold, use that equiity for a bigger down pay for my home in CALI?

My lawyer says we can protect up to $75,000 for the home i buy in Cali as my primary residence.

I really want to keep that second home in TX. I'm thinking that the trustee will see a balance of $80k. Home worth $102,000 by an appraiser. The most it would probably sell for is $80,000 on a good day. I asked 99k and never had an offer. Do you think I could end up keeping it without paying the difference in equity? If the trustee wants to sell it, how long will they try?
They can't accept anything lower than what I owe right?

I guess would borrow money to keep up with the payments.

[keepmine]

I guess would borrow money to keep up with the payments.

Let's see, the home is going to be underwater after the refi and you want to borrow money to finance it? I'd sure rethink the economics of this idea.
As to the refi idea, you can sure expect the mortgage lender to complain and they may well file an adversrial proceeding against you. I'd not do it unless your lawyer says OK.
I'd also expect the trustee to ask how you can afford 2 mortgages and are filing bk?

[Dollar Bill]

I'm looking to borrow money on that home and use that money as a down pay on my primary residence that I plan to buy soon. I would plan to lease it again soon after my discharge. Not refi, and start making payments on the same home.

[HHM]

Apparently you have spoken to a lawyer, but lets back up for a second, what is your situation such that you need to file chapter 7, moreover, if you have the money and credentials to finance a home in CA, are you even sure you can qualify for a chapter 7 BK.

However, the transaction you are considering would not be BK fraud...but you would not be able to discharge the refi note, and if the lender is smart, they would probably require you to reaffirm the debt.

There is the issue of the economics of the deal...1st, is the rent you collecting enough to cover your hard expenses of the TX home and earn you at least some profit?

[Dollar Bill]

Thanks for the post HHM.

It is not rented now. My sister wants to stay there. She would pay the note. Zero income to me. I simply want the 19k of equity in it. Most banks in TX are doing 80% LTV.

My story is this. I am over my head in Personally Guaranteed Lines of Credit for my C-Corp. Over 500k. I plan to put my family in a home here in CA before i file. I ned to sell both homes in TX. I have one pretty much down, and one that I can't sell. I'd like to pull the money out of it before hand,.

I just realized this. If I refi and kept the home, do I run the risk of having liens attached even though I filed ch 7. It is not my primary res. therefore I coudn't protect it from liens or can I?

[HHM]

But aren't you already upside down in the home you want to Refi?

[Dollar Bill]

Well I wouldn't say I'm upside down being that it is not selling. I really want to keep it. If I refi, I get money out and get the same payment. Current balance 57k I refi with a lower int. rate. I get money with same payment with a house I want to keep. The absolute best bet would be to sell it cheap, and be done.

I just wnted to make sure I wouldn't violate the a law by processing a refi and file ch7 3 months later.

Do you know if I could possibly have a lien attached even though I filed ch 7?

[SinkingFast]

How long have you lived in CA?? If it's less than 2 years, you're gonna have to use TX Exemptions.

And,......... Someone else posted here with a similar situation.

Not a rental home. But they owned houses in 2 States due to job relocation. They were surrendering the house in the Old State and wanted to apply the Homestead Exemption to the house in the New State.

The Trustee balked on allowing the Homestead Exemption on the house in the New State. Would only allow the Homestead Exemption on the house in the Old State. That allowed the Trustee to go after non Exempt equity in the new house in the New State.

Something you need to check on prior to proceeding.

Here's a link to one thread by this Member:

http://bkforum.com/showthread.php?t=11018

Not sure how it all shook out.