Chapter 13 refinance/buyout

[EmmaH]

I am a single mother of three, not yet divorced but will be soon. My husband is currently incarcerated. I filed for chapter 13 bankruptcy last year, primarily to save my house which was in foreclosure at the time. Here's the problem. My car has 130K miles on it and is falling apart. My home needs major repairs such as a new roof, new windows, etc. (the heating bills are killing me this winter!). I have been in the plan since November of 2004, approximately 15 months. I know that most of you agree that a chapter 13 buyout/refinance is a bad idea. However, I am at a point in my life where I absolutely need disposable income. For those of you who are parents, you should be able to relate. There is ALWAYS something to pay for when you have kids. Has anyone on this site actually refinanced their chapter 13 successfully? I realize that I am under the 36 month time frame, so my unsecured debt will be adjusted from 10% to 100%. I am hopeful that I can find a reputable company who will be able to help me. If anyone can provide the names of companies who are willing to help, I would greatly appreciate it. I live in Columbus, OH. Since my plan payment is expected to go up approximately $100 per month this December, I would like to get everything taken care of before then. I just want to move on with my life, get a new/used car, and eventually get the needed repairs done to my home.

[13inOR]

Have you considered trying to amend your plan to accomodate the needed repairs? That is a possibility. Also, you can get permission to buy a car as well, with some restrictions, but it is possible. Just some ideas in case you don't want to have to pay 90% more.... do you have plenty of equity in your home?

[EmmaH]

Thank for your reply.

I don't know about plenty of equity, but probably enough. If I wanted to amend my plan, I'm assuming I would have to do this through my attorney? Also, how is it possible to buy a new car in chapter 13?

[13inOR]

Yes, just send the request to your attorney, or call. They submit the appropriate paperwork, that is part of what you are paying him/her for.
During ours, we considered buying a car and requested the paperwork to do so. (we later decided against to just push ours along a while longer, but we could have gotten permission) What our particular trustee required was that it not be more than $10000 in price (which actually can buy a fairly new car)
couldnt be over a certain interest rate (I think it was 26%) and couldnt be over a $300 payment. Also, couldnt be a truck or SUV or a sports car. The best thing is to check with your attorney to see what they think and get the requirement from your particular trustee. Its worth a try anyway, then they amend your plan to allow for the new payment.

[SinkingFast]

You can use the Search Function above right and look up 722 Redemption. It's been talked about here several times since I joined. It's a place that will finance BK's and StaciMM even bought a car thru them.

Something else to check into.

[Lesa13]

EmmaH, I don't have any advice, but I am pretty much in same boat as you (except not so far along in my BK) - old car ready to go, house repairs, etc. So just sending you a hug more than anything.

[therock48881]

we refi'd out of a chapter 13 using Multi-fund of Columbus. our rate went down and our payment actually went down, even though we paid off the 13. here's the website. i strongly recommend you asking for chris thompson. that was our broker and he was GREAT. good luck.

[StaciMM]

TheRock-how far into the 13 were you, and what was your original % to pay back to unsecured? I know you mean to be helpful, and all resources are welcome, but comparing apples to oranges can be misleading.

[Lesa13]

Could we go over again why - if you are able to, anyway - re-fi'ing and paying off the 13 would NOT be a good thing for anyone?

PS - I was told a few weeks ago by someone locally that you generally can refi and pay off the plan once you have been in your 13 plan for at least one year and are current on both plan payments and your other non-plan payments. IF I am able to do this when the time comes, I can't see why I wouldn't?

[13inOR]

Because sometimes if you are in a less than 100% plan, you end up paying back 100% of your debts if you pay off before 36 months, whereas you would have only had to pay a small percentage if you just paid for 36 months, thus defeating your purpose.

[SinkingFast]

Not to mention you jeopardize secured equity in your home on unsecured debt.

If you have a ton of equity and owe a little, that's one thing. If you're maxing out the value of your home, or worse, going the full extent of an over inflated appraised value, that's totally different.

We took on a second to pay unsecured CC debt. Fool me once, shame on the Lenders.

We refi'ed to pay off the 1st, the 2nd, and lots of unsecured CC debt. Fool me twice, shame on me.

Shame on us. We're right back where we were before the refi. Tons of unsecured CC debt and no way to repay it all. House value is close to maxed out and can't sell it.

[therock48881]

quote: "TheRock-how far into the 13 were you, and what was your original % to pay back to unsecured? I know you mean to be helpful, and all resources are welcome, but comparing apples to oranges can be misleading."

we were in our 37th month. we paid back 38% to unsecured. the original poster would have to pay back 100% since she isn't past the 36th month but she claimed she has the equity to do so. therefore, there's not much difference as long as she realizes she has to pay 100%. i agree, it would be in her best interest to wait until month 36 but it sounded like her situation was rather dire. i don't see how that's apples to oranges, i paid off a 13 early and she wants to. her percentage is higher but it's still the exact same process as long as the equity is there.

[EmmaH]

Thanks so much to everyone for all the replies - especially Lesa13 for the hug. I really needed that today!

I'd like to hear more from therock48881 regarding his success with refinancing out of chapter 13. I'm still considering it.

[FHAchpt13refi]

Helping outof Chpt13 bankruptcy

You can payoff your plan as long as you have been in chpt 13 for atleast one year. The process is alittle more in depth with the trustee, but it can be done. You can qualify for and FHA loan with an interest rate in the mid 6% range or less right now on a FIXED RATE LOAN. Your payments have to be on time and you can go to a 95% Loan-To-Value. The most important factor to remember is that if you do buyout of the bankruptcy it is VERY IMPORTANT not to charge up the unsecured debt again. By doing this, you are putting yourself back in the same boat and at that point you CANNOT blame your lender for the loan. Your best bet is to see were your payments are going to be if you were to refinance and buyout of the bankruptcy. At that point, if the payments are comfortable for you, refinance and get yourself on a budget to make sure that you now will establish a savings and be able to make all payments ontime, all the meanwhile having the required amount of disposable income.
Adam Baumlein

[MTG_BANKER_OH]

I am a single mother of three, not yet divorced but will be soon. My husband is currently incarcerated. I filed for chapter 13 bankruptcy last year, primarily to save my house which was in foreclosure at the time. Here's the problem. My car has 130K miles on it and is falling apart. My home needs major repairs such as a new roof, new windows, etc. (the heating bills are killing me this winter!). I have been in the plan since November of 2004, approximately 15 months. I know that most of you agree that a chapter 13 buyout/refinance is a bad idea. However, I am at a point in my life where I absolutely need disposable income. For those of you who are parents, you should be able to relate. There is ALWAYS something to pay for when you have kids. Has anyone on this site actually refinanced their chapter 13 successfully? I realize that I am under the 36 month time frame, so my unsecured debt will be adjusted from 10% to 100%. I am hopeful that I can find a reputable company who will be able to help me. If anyone can provide the names of companies who are willing to help, I would greatly appreciate it. I live in Columbus, OH. Since my plan payment is expected to go up approximately $100 per month this December, I would like to get everything taken care of before then. I just want to move on with my life, get a new/used car, and eventually get the needed repairs done to my home.

Where in columbus do you live? What do you estimate your homme to be worth? What do you think the chapter 13 payoff will be? you can refinance out of the chapter 13, it just depends on if it will work for you. FHA loans allow 95% cash out for your payoff and possible repairs and you can still get a decent rate, but every situation is different. You should be careful with who you work with beacuse many people would try and take advantage if people in your situation. It is not always the best situation to pay off a chapter 13 since in a another year and a half it will be paid off, the other thing is you would be rilling teh debt into a 30 year loan. If you need the loan to help you survive then it would make sense, I understand how a chapter 13 can take all of your disposable income.