Obstacles to Refinancing Home after Filing Bankruptcy
Many clients in our office become discouraged when trying to refinance their home. If you are repaying a large amount of mortgage arrears in your bankruptcy plan then you may not have as much equity in your home as you thought. Most equity loans are capped at 80%. This means that you must have at least 20% equity in your home to qualify.
Many refinance companies require that your bankruptcy be paid off with the equity from the refinance. If you have not been in your Chapter 13 plan for at least 3 years then you would be required by the Trustee to repay 100% of your unsecured claims along with all secured debt. However, if you wait until you have been in your bankruptcy plan for 36 months then you will be more successful at refinancing with bankrupcy payoff as option.
Please fill out our free evaluation form to determine if bankruptcy is right for you.
