top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

Buying a house while in a CH13

Collapse
X
Collapse
 
  • Page of 1
  • Filter
  • Time
  • Show
Clear All
new posts
Previous template Next
    #1

    Buying a house while in a CH13

    I've searched the forum and couldn't find an answer to my question, so here you go...

    (some back-story)

    So, for the last year I've worked diligently on repairing my credit by fixing inaccuracies. I've done this in the hopes that I'd be able to purchase a house at some point within my 13. It's taken some time, but I've gotten two of my three FICO scores raised significantly (from the 500's to the upper 600's).

    I've also, in that time, been fortunate enough to have a significant pay increase since I filed 3 years ago (getting ready to start year 4 of a 5 year plan), and I have been pre-approved for an FHA home loan, with 3.5% down. Now, I've sent the pre-approval letter, my 2010 tax returns, last two pay stubs, and amended I & J, to my attorney so I can get approval to incur new debt from the trustee.

    I asked my attorney, since he has worked with the trustee for 15 years, if he was of the opinion that the trustee would grant me permission to do this, my attorney's answer was yes. He did not see it as being a problem.

    My question is this...has anyone purchased a house while in a 13? And if so, how long did it take the trustee to get back to you with approval? I'm trying to time this right because my pre-approval letter is for 60 days. At the end of that time, the lease on my current house ends. And my attorney doesn't really know how long it will take the trustee to get back to me.

    I realize that I'm fortunate enough to have the pay increase, and as such, the trustee isn't taking any more money from me, and he'll (most likely) allow me to purchase a house. I know that many, if not most, people are not as fortunate to have lenient trustees, or a pay increase. So for that, I'm quite thankful.

    I appreciate any responses. Thanks.
    Tags: None
    #2
    Wow! Congratulations. I don't have answers for you. But, I would like to know the name of the lender/broker you are using b/c I would like to do the same while in a Chapter 13.

    Comment

      #3
      Depending on how your chapter 13 does their hearings, and if they allow negative notice language on this matter (neg. Notice means no hearing if no objections within a period of time, usually 21 days.) you should have the signed order from the judge within a month.

      Congrats and good luck
      Disclaimer: I am not an actor on TV, but I play a BK Paralegal in real life. Nothing I say should be construed as legal advice, or really anything but entertainment. Please seek out professional help.

      Comment

        #4
        @BKParalegal - thanks a bunch. This is helpful. Also, do you know if the court would be less apt to grant approval for an FHA 5/1 ARM? I'll be out of the CH13 in 2 years, so there's no chance of the rates going up in the time I have to make my trustee payments.

        @bling32 - the bank used to be called Security Savings, but was bought out by Simmons First National. I don't know if they're located in Georgia or not, but any bank that does FHA loans (there are plenty of them) will be able to help you out, because you're going by the FHA guidelines, not the banks. I think the guidelines now is a middle FICO score of 640, one full year of on-time payments to the trustee, and 2 years of tax returns to verify income.

        Comment

          #5
          Does anyone know if buying a home with all cash during a 13 is allowed?

          I am considering walking from my house, and then purchasing a condo with cash (cash from a 401k loan).

          Haven't contacted the attorney on this. But, I am thinking that its not going to fly with the BK trustee. So, my best bet is to wait for discharge before moving forward with any major transactions.

          Thanks!

          Comment

            #6
            Originally posted by espo1357 View Post
            Does anyone know if buying a home with all cash during a 13 is allowed?

            I am considering walking from my house, and then purchasing a condo with cash (cash from a 401k loan).

            Haven't contacted the attorney on this. But, I am thinking that its not going to fly with the BK trustee. So, my best bet is to wait for discharge before moving forward with any major transactions.r r

            Thanks!
            I wouldn't do it. There is probably a clause in your plan stating that you can't go into more than $xx.xx without permission from Trustee.
            I foolishly took out one of those 401k loans to help save my house / credit and the end result was that it just postponed the financial crisis for awhile. The following tax year I ended up paying the remainder of my 401k in taxes ($25k)...I later found out that your 401k savings are exempt from bk..
            Don't take life too seriously, you won't get out alive.

            Comment

              #7
              If you're taking out a loan, you will have to get permission; regardless of what it's for. Now, if you were paying with cash that you had on hand, that's different. That would be fine.

              Comment

                #8
                Originally posted by espo1357 View Post
                Does anyone know if buying a home with all cash during a 13 is allowed?

                I am considering walking from my house, and then purchasing a condo with cash (cash from a 401k loan).

                Haven't contacted the attorney on this. But, I am thinking that its not going to fly with the BK trustee. So, my best bet is to wait for discharge before moving forward with any major transactions.

                Thanks!
                If the source of the funds is going to be a 401K "loan", non-starter, won't be allowed unless you can keep making your same chapter 13 payment. But if you were to take that big of a loan, you are inviting a complete over-hall of your plan, essentially redo'ing the 13 which may not be in your interest to do. I would also recommend against an early withdrawal.

                If the cash has some other external source (gift), probably okay, but again, now you don't have a house payment and could be inviting a complete over hall of your plan.

                Comment

                  #9
                  Originally posted by HHM View Post
                  If the source of the funds is going to be a 401K "loan", non-starter, won't be allowed unless you can keep making your same chapter 13 payment. But if you were to take that big of a loan, you are inviting a complete over-hall of your plan, essentially redo'ing the 13 which may not be in your interest to do. I would also recommend against an early withdrawal.

                  If the cash has some other external source (gift), probably okay, but again, now you don't have a house payment and could be inviting a complete over hall of your plan.
                  Thanks HHM.

                  Got about 50 more months to go, and now I am looking at walking from the house (still current). I almost did it at the end of last year, but got cold feet. However, I don't see any hope with this property, and I would eventually like to do a 401k loan and just pay cash for a small condo and be done with this real estate finance mess.

                  And I think the best way to do that, is to just wait for the 13 to get discharged, right?

                  Comment

                  Previous template Next

                  bottom Ad Widget

                  Collapse
                  Working...
                  X