never seen this question before

[tadbitconfused]

We are meeting this month to file bankruptcy.. We had filed before but things happened and we backed out... Everything is straightened out now...But before leaving the lawyers office the last time he said "buy a house"... I laughed and said oh yeah I will do just that.. He said look hard you might be able to find something.

Well we are just about to file and we found a guy with an owner carry loan... but it just doesn't feel right won't that place flags up.. am I over analysing this,,, what do you guys think

[wooisme]

that doesn't sound right to me either since the trustee really looks at what you buy JUST before declaring bankruptcy

[Flamingo]

Something doesn't make sense here. You are planning on filing bankruptcy yet thinking about buying a house right before? Have you discussed these thoughts with your attorney before you file? If you are able to purchase a house, how do you qualify to file bankruptcy? Everything you do financially is analyzed for at least the six month period prior to filing. You can bet a house purchase during that time period would raise a big red flag.

[JollyGG]

I assume the reason to buy a house before a chapter 13 are

1. You probably won't be able to for quite some time.
2. You can now list home maintance costs on your schedules.
3. You have a mortgage to list on your schedules.
4. Your mortgage payment will stay the same for all five years (assuming fixed rate), where rent is likely to increase over time.
5. If you have a nonexempt asset (cash or investments) you are converting it to an exempt asset (limited equity).

2 and 3 giving you less disposable income and a lower chapter 13 payment.

I have also seen it recomended to buy a reliable car before a chapter 13 so that you have something reliable that can last for five years. After all it is near impossible to afford a new debt (car) in a 13 if something happens to yours and it's dificult to find a lender. Also something that requires less maintance. Plus a car payment gives you less disposable income.

[jgarton244]

If you can find an owner that will finance your purchase and the monthly payments for mortgage taxes and insurance are close to what you are paying for rent and rental insurance it may be a good idea. You need to clarify that the expenses for housing allowed under your means test are at or under the allowable expense. If your housing expenses are no more to buy then to rent, I see no issues. Caveat would be the type of loan the owner is willing to offer you. If it has a balloon payment due during the 5 years in your plan, you "may" have a tough time refinancing to pay off the owner. If you could buy the home on contract for deed, with at least a 7 year balloon, or even better, the owner will finance for 30 years at a decent interest rate, and file in about 6 to 8 months down the road, consider the option.

I would definately sit with your attorney and review your options. I would also have the same attorney represent me in the purchase of the home, if you choose this option.

We bought a home 9 months before we filed from the owner. We had a five year ballon payment. After two years, with no late payments to mortgage holder, trustee or any other debts, we refinanced through FHA at 6%.