Can we refi during a CH13?

[julsmom]

We have a nasty ARM that we need to get out of, filing CH 13 to strip lien & finally be back upside right on the house. Not currently using the VA eligibility we have so that would be available. if we ask atty permission is that even a possibility? Payment would look to be about same so no increase, just resetting to standard rate???

we are in a 5 year plan so does that mean we cannot do anything for 6 years with this????

[despritfreya]

You can refinance while in the 13 however you have two issues that I see based upon your post:

1. Qualifying for a new loan based upon a) your "credit worthiness" while in bk and b) the "loan to value" allowed by the new lender.

2. Getting a release (or subordination) from the 2nd. Remember, in most jurisdictions, your lien strip is not effective until the entry of your discharge.

If your Plan has not been confirmed and you manage to get passed the above issues, you will want to file a Motion with the Court allowing you to refi (incur new debt). If your Plan is confirmed the Order Confirming should have "vesting" language that allows you to refinance, transfer, sell or otherwise dispose of the home without further Order of the Court.

Des.