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Obtain New Mortgage During Chapter 13 with Co-Signer

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    Obtain New Mortgage During Chapter 13 with Co-Signer

    Hi everyone,

    I am 14 months into a 5 yr, <100% repayment plan. I filed bankruptcy after a bad investment in real-estate and getting taken advantage of by a contractor. I can go more into that if asked but it was my ignorance and naivety that ultimately lead to where I'm at today.

    I am currently renting. A friend would like to purchase a house with me. It is a mutual relationship though we are not married and not romantic. She has a substantial amount of money that was gifted to her but her monthly income is low. We believe using her gifted money as a down payment and with combined incomes, we could purchase a very middle class home together. Has anyone done anything like this during chapter 13?

    Based on my calculations, my budget would remain the same with the house as compared to me renting. I worry that my trustee will not allow me to take on new debt or even worse, they allow me to take on new debt but increase my monthly payments since I would have a person sharing bills with me. I look forward to hearing your questions, comments, or concerns.

    Thank you!
    Jay

    #2
    Hopefully someone with experience will get back to you. I could be wrong, but I don't believe you'll be able to take on this new debt. Any chance you could call your attorney just to ask a hypothetical question?? I hope you're staying well and safe.
    Filed Chapter 13 - 07/20/12
    Discharged 8/2/16

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      #3
      Can you elaborate on why you don't think I'll be able to take on the new debt? And lol on the hypothetical! I may be able to present something to him like, "I know a guy"

      Comment


      • Justme79
        Justme79 commented
        Editing a comment
        JayThrowaway - I've been doing research on this topic, as I myself would like to purchase a home before discharge. I've found several people that are in our shoes that have obtained a mortgage, and there are banks that will give us loans as long as we have perfect payment history since filing. of course the trustee would need to sign off on this, but if your portion is about the same amount as your rent, I don't see the problem. With an FHA loan, you can buy a home while still under a Chapter 13, as long as you have made all the payments on time in the plan for 1 year and the bankruptcy trustees approve the purchase. With any other conventional loan program, you will have to wait 2 years after discharge to qualify for a mortgage.

      #4
      Do you have your confirmation notice? It may have a note saying if you are allowed to incur new debt. Also the problem is that the lenders won’t give a loan to someone in bankruptcy. Right now with the virus, it’s hard to get a mortgage, as it is. As for the hypothetical, I think just asking if you can buy would be the way to go 😀
      Filed Chapter 13 - 07/20/12
      Discharged 8/2/16

      Comment


        #5
        I think you waited too long to get a mortgage. It is way harder to get a mortgage today versus six weeks ago.

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