Can I do this in a 13?

[witeout]

We are 2 years into a 5 year plan.
We pay 100% but only to 4 people (atty, trustee, auto co, and house arears).

There are HUD homes occasionally going cheap here.
Have any of you heard of anyone doing the following during their 13?

1.Get permission to get a 401 K loan to pay cash for cheap house.
2.Then foreclose on original house,(surrender in other words?)

IF this would be allowed, I don't think the drastic $ difference will hurt us because we are already at 100% payback?

I would want this to be seen as a drastic lifestyle change, for the better, not someone abusing the program?
I mean a paid for tiny house sounds good in this economy!

But can this be done?
I am afraid to ask my atty yet......

[lrprn]

Given that you have three long years left to pay on your plan, why do you want to take most/all of your extra cash and/or take out a loan against your retirement to buy a questionable, unknown quality, high-potential money pit of a HUD house (they are "cheap" for a reason) and surrender your current house at this point in your 13?

[LadyInTheRed]

lprn asks a good question. I'll add another: Why are you afraid to ask your attorney?

[newbie2]

I've gone through some of your older posts and it sounds like you are really struggling in the Chapter 13. You talked at one time about converting to a Chapter 7. Did you ever get a response from your attorney about that? I'm sorry things are so rough for you. If you haven't yet, please sit down face to face with your attorney and discuss your options.

[witeout]

I am asking simply, legally, if you can:

1. buy a home with a 401 K loan during 13
and
2. Then surrender your original house.
Is this even legal?

I am hoping someone here is a more "think outside the boxer"

Without boring you with the details, we have always wanted to join the tiny or "small house movement". It's complicated to explain in a single post.
It's a lifestyle we desire and is way more than about house size.
(Google tiny house blog or tiny life blog to get a better picture)
I am after "freedom" not the typical bigger is better American dream.

The problem is that this current house is tying us down to live that dream.
Can I use this 13 as a jump start to begin that dream?
People can not sell their homes here because GA WAY overbuilt.
People can buy a new home for nothing so the immaculate used homes (mine) wont move.

Also, you would be quite amazed at what's selling right know through HUD.
Some homes are brand spanking new or less than 6 months.
The one we are after is actually with acreage and we will build new or remodel the house.

Again I need a frugal person that can think outside the typical American consumer lifestyle box.

Can I do these 2 steps legally?
I am afraid to ask the atty because I am afraid they will say a big fat NO, and then this dream just keeps passing me by.

I believe there is more to life than be married to a mortgage or paying a slum lord here a HIGHER price than my mortgage payment is.

There is another option. Just can I do it mid 13?

Thanks for your thoughts!!!

PS we did not convert to 7. We pay EVERY month on 100% of our debts but the mortgage co "lost" 4 months of payments and tried to foreclose on us.
KEEP YOUR RECORDS people. My records saved me.

Lets face it, just because you do the morally right thing doesn't mean that a bank does not make human errors that involve court dates.

[Pandora]

if you truly are in a 100% plan per your confirmation order (100% to unsecured creditors) - then you should be able to surrender the house in your Ch. 13 via amendment. However - I do believe what you're talking about doing may be considered a sort of "buy and bail"... Not to mention you need the permission of the trustee to do what you're asking.

Ask your lawyer - that's what you hired him/her for.

ETA: reading this thread http://www.bkforum.com/showthread.ph...137#post525137 you state you are basing the 100% on the datacenter info. Dont do that... datacenter always has 100%. You need to look at your confirmation order

[ABC]

No lender will approve a Buy and Bail so obvious.

[witeout]

This is why I am asking, I don't want to abuse the process but am open if something is moral/legal.

I just heard from atty office and they said converting to 7, let that discharge, then I could do this.

I am a little confused on secured and non secured and not sure if that would effect things. Again I only pay atty, trustee, Honda, and house arears -CITI, no credit cards or anything)
No one else.

Is converting hard? How long is the process?
Does it truly have an "end date"? I see so many people here in limbo at the very end?

Thanks for your help!!!!

[newbie2]

You absolutely can convert to a Chapter 7 and surrender your house. In fact, if you want to surrender your house do it now, because a Chapter 13 does not discharge the mortgage debt. "Buying and bailing" doesn't apply to you here. You are not asking for a new mortgage on another house while bailing on your current mortgage. ( Personally I would rent for a year after surrendering your house, just to be sure being a homeowner is what you want again.)

When you convert all your debt will be discharged (with the exception of the "normal" things that Chapter 7 doesn't discharge..student loans, domestic support debt, etc.) If you qualify for a Chapter 7 then it isn't hard at all to convert. The normal "end dates" would apply - 341 meeting, waiting 60 days, etc.

Good luck to you, I hope it works out well for you.