Home purchase w/someone else while in 13

[HHM]

Out of curiosity, how far along are you in the process, is this purely hypothetical, or did you find a lender that would actually approve you for a mortgage while in chapter 13 (cosigner or not)? There is an FHA refi program in 13, but I am hard pressed to think of anyone that has ever bought a house while in an active 13.

Honestly, I don't think the trustee is really going to care about any of it; but you will need to get permission and modify the plan.

[justbroke]

If I was to purchase a home while in 13 with other person who is not in BK, does anyone know how the trustee will treat the petition?

Are you actually in a Chapter 13? If you are planning to file one, it wouldn't matter unless you are already in one. To create new credit obligations in an active Chapter 13 requires approval from the Trustee and court. If you purchase a home before filing, it is treated no differently than any other purchase -- regardless of whether you are a co-owner with a non-debtor (non-filer). The problem would be if you don't live there; some could complain that it's not "necessary for an effective reorganization" since you don't need it for shelter. I'm going to assume that you are going to live there.

My understanding is that they would want to know the source of the downpayment as this might suggest additional disposable income by which to fund and larger monthly plan payment.

Not exactly. A home, in most cases, is protected by homestead exemptions (state or federal). These can be sizable. In fact, many Floridians have sheltered money in their exempt homestead by moving cash into their home. Some Trustees have fought this, but so long as it was legitimate, then they don't care. What is the source of your downpayment anyhow?

I might have an opportunity from a family member to help out with the down payment. how will that be taken by the trustee? Or should a gift or loan of that nature be an issue?

Actually, this is the part that may get interesting. Depending on the Trustee, they may see it as income and try to bother you about it. However, if the best way to protect the family member is to have them record a lien and properly perfect it immediately upon closing. Perhaps working with the title / escrow agent, you can get this all done at closing. That would mean a promissory note and mortgage needing to be draft and recorded as part of the process.

Now, if I were Trustee, I'd be asking why you're buying a house when you're insolvent anyhow? Could raise a "good faith" objection, but it really depends on the situation, Trustee, and circumstances.

How would they treat the petition with respect to the disposable income? Will they treat us a couple subject to different spending?

They can't treat you as a couple unless you are married.

Why do you need to file Chapter 13? If you don't have any money (under the median) and high expenses... why not just file Chapter 7? Or, are you worried that filing before buying will hurt you with expenses?

This would certainly be an interesting case for an attorney. Too many what-ifs if you were to ask me.

[getback]

If I was to purchase a home while in 13 with other person who is not in BK, does anyone know how the trustee will treat the petition?

My understanding is that they would want to know the source of the downpayment as this might suggest additional disposable income by which to fund and larger monthly plan payment.

I might have an opportunity from a family member to help out with the down payment. how will that be taken by the trustee? Or should a gift or loan of that nature be an issue?

How would they treat the petition with respect to the disposable income? Will they treat us a couple subject to different spending?