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Is it legal to refinance when Chapter 13 is in affect?

Posted on: 27th Dec, 2006 08:39 pm
i filed chapter 13 to prevent foreclosure. the trustee fixed up one hearing which i attended. and, now i have another one in 6 weeks. they are asking me to pay the debts in 3 years but i requested to extend it for 5 years. a few days back i found a hard money lender who has agreed on a 75 ltv refinance and repay all debts. does the law allow me to refinance prior to the second hearing. should i approach the trustee and lawyer to fin out if it is legal?
You need to notify the creditors about the refinance. A meeting with the creditors is also required. It is up to them to decide whether they will stop the bankruptcy proceedings.
Posted on: 27th Dec, 2006 09:39 pm
Welcome Ashley.

You may want to have the chapter 13 dismissed. For that, you need to contact an attorney.
Posted on: 28th Dec, 2006 01:40 am
Hi Ashley,

If you are in chapter 13 for 6 months, and have been following a payment plan approved by the trustee, you may be eligible for the refinance. For this, you can approach your lawyer so that he can help you with the legal formalities for getting an approval from the court.

However, the time period after which you will be allowed for refinance while in bankruptcy may differ from one lender to another. This also depends on the decision taken by the court.

Once you repay your debts using the refinance loan, you will be able to get a discharge from chapter 13.

Thanks,

Caron.
Posted on: 29th Dec, 2006 02:07 am
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