Can I Buy a House While I am Still in My Chapter 13?
Yes! You can purchase a house and take out a mortgage loan while your Chapter 13 is still on-going. Congress and Bankruptcy Judges recognize that during the five year term of a typical Chapter 13, your circumstances may change and that you may have a need to purchase a house.
As you might imagine, however, there will be paperwork that we need to complete if you want to take on a mortgage obligation and assume responsibility for a home purchase. Specifically, your Chapter 13 trustee will want to know the details about your home purchase. You will have to get court approval before you can proceed to closing.
Each of the Chapter 13 trustees in the Northern District of Georgia has a procedure to approve a new mortgage loan. Here are links to the loan applications for each of the trustees:
Trustee Nancy Whaley - outside loan application
Trustee Adam Goodman - outside loan application
Trustee Mary Ida Townson - outside loan application
As you will see in these loan applications the trustee will want to know where you got your down payment, how much you will be paying each month and how the new loan affects your budget.
These are the same forms, by the way, that you would use if you want to refinance a mortgage.
In addition, the trustee may want you to increase the amount that your unsecured creditors receive in your Chapter 13 case.
Loan Applications Add Delay to the Process of Buying a Home
Although home purchase loan applications are routinely granted, you can see that there will be additional paperwork and effort by both you and us. As such, you can expect that the loan approval process from the trustee will add three to four weeks to the process in general.
As is the case with any change to your bankruptcy, we encourage you to let us know early about any potential home purchase.
|
