Buying a Home During Chapter 13: How Can I Do It?
Bankruptcy is an excellent solution for your financial troubles as it gives you a chance to restructure and consolidate your debt and keep your property. All this spells financial freedom. However, what happens if you would like to buy a home during Chapter 13? Is it possible? Yes, it is, but the process can be complex and usually requires assistance from La Mesa’s experienced Chapter 13 bankruptcy lawyers. Here are some details on the topic.
How do I qualify to buy a home during Chapter 13?
The first thing you should inquire more about is whether or not you qualify for purchasing a home during the duration of your Chapter 13 process. The good news is that yes, you can buy a home while you’re in the middle of Chapter 13. However, you first need to qualify, and that’s vital. Here’s what the process of ensuring your eligibility is like:
- Debtor speaks to a lender to get qualified for the home loan they want.
- It is up to the lender to approve or qualify the debtor.
- Most loans require at least a year in a Chapter 13.
- You have to keep meeting payments according to the reorganization plan on time.
- You have to provide proof of successfully meeting monthly installment payments.
The court has to approve the debtor’s request
The debtor has to obtain the necessary permission from their bankruptcy court to acquire additional debt. If the debtor wishes to receive approval, they have to provide the following information:
- The terms of the property purchase:
- The source and the amount of the down payment
- The PITI payment
- Proof of current income for the last 3 months
- The budget after the potential approval of the loan
- The impact of this loan on your Chapter 13 creditors
How long does the approval process take?
First things first – once you establish that you qualify for purchasing a home during Chapter 13, you should immediately let your attorney know. From there, your lawyers will seek approval from the court for you to actually purchase a home during bankruptcy.
Once you provide all the necessary information to your lawyer, you can expect them to file a motion within a couple of weeks, once they’ve carefully reviewed all the documentation. From there, the hearing can last as many as 45 days.
Once your purchase is approved, you can expect to undergo a mortgage procedure that consists of the following steps:
- Consultation: You will meet with a Mortgage Consultant who will give you a foundation for pursuing the appropriate loan.
- Application: You will then fill out your application online, in person, or over the phone.
- Review: the mortgage lender will run your credit review.
- Submission: The processing specialist will gather the information you need to submit your loan application.
- Closing: The mortgage lender collects the finalized documentation, while your escrow agent or closing attorney arranges the final escrows and insurance necessary for closing the deal.
Who are La Mesa’s most reputable Chapter 13 bankruptcy lawyers?
Now that you know the mechanisms for purchasing a home during Chapter 13, why not get familiar with other important aspects that will help you with your claim? See what people usually want to know about Chapter 13 to help you get started, then see why people usually opt to file this bankruptcy, and see how Chapter 13 is better than debt consolidation. Once you’ve gathered the information, it’s time to find professional legal representation.
And that’s when you should contact Chang & Diamond, the leading bankruptcy lawyers in La Mesa & beyond! They’ve been at the forefront of bankruptcy law for many years, which gives the experience and the expertise necessary to handle your case successfully. Give us a call, schedule a free consultation, and then go to Briercrest Park and enjoy the view knowing you’ve taken your first step towards financial independence. Give us a call today!