Hurricane Ida- need new house

[Lncarr]

Good morning,

We are currently in year 4 of our 5 year ch13 bankruptcy plan. Two weeks ago. Our home (that we rented) was destroyed by hurricane Ida. We are staying with family now, but only for short term.

Now that we are not paying rent, we are rolling that money into paying off our bankruptcy early. Is this a a good idea to continue?

1) How likely are we to get approved by the trustee to obtain a new mortgage during bankruptcy?

2) If we chose to wait until our bankruptcy is over, how soon could we likely get a new mortgage of approx 350,000?

[justbroke]

Welcome to BKForum. I'm in Florida and I understand these power cyclones can destroy one's home. I can sympathize with loss of property and I'm very sorry that you lost your home.

We are currently in year 4 of our 5 year ch13 bankruptcy plan. Two weeks ago. Our home (that we rented) was destroyed by hurricane Ida. We are staying with family now, but only for short term.

Thank God for family. I'm glad that you are somewhere safe.

Now that we are not paying rent, we are rolling that money into paying off our bankruptcy early. Is this a a good idea to continue?

I would not just send money to the Trustee outside your normal payment. There are a bunch of reasons to not just try to pay it off early. One of which is if you were required to be in a 60-month plan, nothing short of paying 100% of the allowed unseucred claims plus the Trustee commission, and any residual attorney fees, will get you out of plan. So sending in "extra" money or thinking that you're paying off a Chapter 13 prove fruitless.

1) How likely are we to get approved by the trustee to obtain a new mortgage during bankruptcy?

They do it all the time so long as your plan isn't really affected by the new costs.

2) If we chose to wait until our bankruptcy is over, how soon could we likely get a new mortgage of approx 350,000?

You would need to obtain an FHA mortgage. While some lenders say you must wait until so long after discharge, for a Chapter 13 that's not the case. But, it's probably better to get approved and get into the new house towards the end of the Chatper 13 just to avoid having to find an FHA lender that will take the loan.

FHA current nationwide maximum is $356,362 (2021). That's the maximum loan after you pay your minimum 3.5% down payment. Depending on how large you make your down payment, the maximum value of the house that you would buy is closer to $371K. Remember, the maximum is the maximum loan amount. Not the maximum home value you can purchase. There may be other caveats in there as well.