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How soon can I buy another house during a Chapter 13 (three months in)?

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    How soon can I buy another house during a Chapter 13 (three months in)?

    Hello all.

    I filed several months ago, and I am thinking of buying another home when the down payment gets all set up (I will be getting money from a sale of a house a few months before I filed). My attorney and trustee know about the money, but I will net enough to put down about 15% for another house.

    So, my question is, how long will it take for me to qualify to buy a house?

    Do I need permission to buy another property while in a Chapter 13?

    Or

    Is it best to just wait until I get a discharge in another 33 months from now?

    Just exploring options.

    I don't need the house, but I would like to set up investments for retirement. I have another 7-14 years before I actually retire in my late 50s/early 60s.

    Thank you.

    #2
    It's at least one year in with 12 months of solid payment performance to the Trustee. It will also require Trustee and court approval. There are a couple of companies that do the Chapter 13 mortgages, but your scores will need to be good (620+ middle form the FICO 5/4/2 varieties), and you need to find that company willing to do the mortgage. You could get an FHA loan, but Conventional/Jumbo will likely be out of reach.

    While it can be done, I've only read about one of them here on BKForum.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

    Comment


      #3
      Thanks for the feedback.

      I figured it would be a royal pain in the BLANK.

      Probably best to just wait until I get a discharge and my credit goes back to 750.

      Seems like this would just open up a can of worms as well, and that is definitely not worth it.

      Comment


        #4
        Originally posted by chargers777 View Post
        Thanks for the feedback.

        I figured it would be a royal pain in the BLANK.

        Probably best to just wait until I get a discharge and my credit goes back to 750.

        Seems like this would just open up a can of worms as well, and that is definitely not worth it.
        Rule of thumb for 99% of all Chapter 13 participants: lie low, don't rock the boat; the less the Trustee has reason to focus on you and your case the better it is for you.
        Latent car nut.

        Comment


          #5
          Absolutely shipo.

          Thank you for your input.

          Comment


            #6
            Originally posted by chargers777 View Post
            Hello all.

            I filed several months ago, and I am thinking of buying another home when the down payment gets all set up (I will be getting money from a sale of a house a few months before I filed). My attorney and trustee know about the money, but I will net enough to put down about 15% for another house.

            So, my question is, how long will it take for me to qualify to buy a house?

            Do I need permission to buy another property while in a Chapter 13?

            Or

            Is it best to just wait until I get a discharge in another 33 months from now?

            Just exploring options.

            I don't need the house, but I would like to set up investments for retirement. I have another 7-14 years before I actually retire in my late 50s/early 60s.

            Thank you.
            I refinanced a mortgage, but the process is similar. You need 12 months of ontime post-petition payments to the trustee and all post-petition creditors. The trustee will not approve a mortgage/house purchase much bigger than the current housing payment unless you are in a 100% case. Monthly mortgage payments are a lot higher than 2021 and prices haven't dropped nowhere near enough to compensate for that. With a below median case and you're already boxed in with a low housing payment, I don't see how you can qualify for any home purchase unless it's super cheap.

            Comment

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