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Can You Refinance Your Home While In A Chapter 13 Bankruptcy?

by | Nov 24, 2021 | Bankruptcy |

Chapter 13 bankruptcy is a reorganization of one’s debts as a repayment plan based on what you can afford to pay. It can last from three to five years. Chapter 13 bankruptcy is a powerful tool for you to regain control of your financial life and get a good fresh start. People often wonder if they can refinance property after filing for bankruptcy and the answer is, yes, it is possible. There are many options and loan programs that can help you refinance a home.

It is important to keep in mind your bankruptcy start date, the status of your bankruptcy and the date of discharge or dismissal. Once this information is gathered, it is easier to accurately find the right home loan for you refinance and lenders can direct you to the right program. There are a few loan programs that you may qualify for: FHA Insured Home Loans and VA Insured Home Loans. There are different qualification guidelines that each offers so it is best for you to know an overview of each program and figure which will be the best fit.

FHA guidelines –

If during the bankruptcy, you must have a record of 12 months’ worth of on time bankruptcy plan payments and permission from a bankruptcy court in order to refinance during your Chapter 13 bankruptcy.

VA guidelines –

identical to FHA guidelines in that you must have a record of 12 months’ worth of on time bankruptcy plan payments and permission from a bankruptcy court in order to refinance during your Chapter 13 bankruptcy.

These are just a few guidelines to keep in mind when deciding on which program fits you best. Just because the status of your bankruptcy may not qualify you from a program listed above, does not mean you are fully disqualified. There are other factors involved such as income, debt, credit history and current loan to value ratio. Having an experienced bankruptcy attorney to help you will ensure that the refinance process runs smoothly.

Here at DAL Law Firm, we can help answer any further questions you may have. Give us a call or text today for a consultation at (206) 408-8158.