Buying a house beofre filing 13

[grndmom53]

We own a home with a $2240 house payment which we are now 2 months behind. We have found an owner who will finance a home for us with 8K down & payment of $1400. We are due to close on 4/25. Talked to a realtor about selling our original home & she said we would have to come up with money to sell it, lots of short sales & foreclosures in AZ at this time, so we are going to give it back.

WE are going to be filing a 13 & my question is this: Will the down payment for the new home be looked on as "preferential treatment". We did wipe out a small 401K account for the down for the new home. Also not sure if that 8k will be looked at as income. Probably wont be filing until Summer. Havent paid cc's since November so hope we dont get served with papers!

Thanks

[Flamingo]

Here's reality...You are two months behind now in a mortgage on your home you want to foreclose on. You want to take $8,000 and purchase another home. You state you are "going to be filing" a 13 (have you discussed all this with the attorney filing your Chapter 13) and are now asking if an $8,000 downpayment will be looked on as "preferential treatment." You used the $8,000 from your 401(k) money for the down payment (which will result in taxes and penalties for you this tax year).

Since it is apparent you have not discussed this matter with the attorney who is to file your Chapter 13, I suggest you have a consultation with a BK attorney at your earliest convenience before you sign any settlement papers because if you can afford to purchase a house before filing Chapter 13, you can't state that "we are going to be filing a 13." There are all sorts of red flags raised in your posting. Best of luck to you.

[keepmine]

Also, why are you filing a 13 ?

[grndmom53]

Thanks for the info. My husband is retired but had a part time job which he had to quit due to his diabetes & heart condition issues. When we talked to an attorney a few months ago we asked if we could try & downsize due to change in our financial situation. He didnt think it would be an issue. Our current home is just costing us too much for payments, taxes & insurance. We cant keep up with the maintenance.

Since we couldnt sell our home, our son had planned to move in & take over the payments but is no facing job transfer.

If we dont file a chapter 13 for the cc debt, we will try to work it out with the cc companies or a debt relief company.

[HHM]

Legally, there is no problem with buying a house before you file BK. The $8,000 is not a preferential payment.

Stay away from debt relief agencies, if you are already in a position where a BK would help you, you a way past getting help from debt relief agencies (easily more than 75% who start with debt relief agencies end up filing BK anyway).

[keepmine]

Thanks for the info. My husband is retired but had a part time job which he had to quit due to his diabetes & heart condition issues. When we talked to an attorney a few months ago we asked if we could try & downsize due to change in our financial situation. He didnt think it would be an issue. Our current home is just costing us too much for payments, taxes & insurance. We cant keep up with the maintenance.

Since we couldnt sell our home, our son had planned to move in & take over the payments but is no facing job transfer.

If we dont file a chapter 13 for the cc debt, we will try to work it out with the cc companies or a debt relief company.

Why can't you file a Chapter 7?