Met With Lawyer Today...??'s

[Natalie1706]

We met with a lawyer today and they figured our best option would be a chapter 13. I have been researching ch. 7 since I thought that is what we were going to file, but now I need to know a little about ch. 13. Are you able to get a mortgage during a chapter 13? I know it takes 5 yrs to be discharged, and we would like to buy a home before then. Is is possible?? I know that all bankruptcy is considered "financial ruin" but is a chapter 13 "better" then a chapter 7. Telling me any of your experiences with ch 13 would be helpful also!

THANKS!

Natalie

[kmb]

Unless you're in 100% payback, chances are that the trustee is not going to let you take on the additional debt of a mortgage, unless it results in a large cost savings over what you're paying now in rent, and then that extra money would have to go into the plan. There will also be questions on how you came up with the down payment for a house if you aren't in 100% payback, since that too would be money that could go into the plan. And then finally you'll have to find someone to give you a mortgage, and with the credit crunch, it probably won't be the easiest thing to do. I have read that you can qualify for an FHA mortgage after being in Chp 13 for one year, but I do not know if that is for new mortgages or just re-fi's.

Good luck!

[dragonnfly]

May sure you go and meet eith more then one lawyer. We only met with one lawyer and was told we could only do a 13 had the paperwork filled out and everything and he did something stupid and we dumped him and moved on. We filed a Ch 7 with another lawyer and so far so good.

[Flamingo]

We met with a lawyer today and they figured our best option would be a chapter 13. I have been researching ch. 7 since I thought that is what we were going to file, but now I need to know a little about ch. 13. Are you able to get a mortgage during a chapter 13? I know it takes 5 yrs to be discharged, and we would like to buy a home before then. Is is possible?? I know that all bankruptcy is considered "financial ruin" but is a chapter 13 "better" then a chapter 7. Telling me any of your experiences with ch 13 would be helpful also!

THANKS!

Natalie

You in all likelihood will be unable to buy a home during a Chapter 13. Chapter 13 Plans run from 36 to 60 months and all vary tremendously due to specific state exemptions, laws, debt, assets, income, etc. Filing BK means one is "insolvent." You owe more than you have; yes in plain words "broke." However, it is an opportunity for a new start to eliminate the burden of debt and start over; most learn from it and restart their lives but there are those that use it as a budgeting tool filing BK after BK. I have personally been told by attorneys, accountants and creditors/mortgagors that creditors view Chapter 13 more favorably over a Chapter 7 since there is payback of all or a portion of the debts owed. That preference can also be seen via your credit reports; a Chapter 13 is only listed on them for 7 years from the date of filing; it is listed for 10 years from the date of filing for a Chapter 7.