Chapter 13 And Mortgage Refinance
| Chapter 13 bankruptcy filing, also known as a wage earner’s plan, is in many ways similar to a mortgage refinance as it allows the borrowers having a regular income to have their repayment plan rescheduled according to their earnings. |
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In case of Chapter 13, bankruptcy filing is preferred by borrowers who are not willing to surrender their property to the lender and are willing to pay back their debts under a less-pressured repayment structure. In this regard, the borrower can either make an arrangement with the same lender or else opt for a mortgage refinance.
Many homeowners, who file a Chapter 13 bankruptcy, remain with the opinion that nothing can be done further rather than getting out of the bankruptcy case early. However, there are banks and lending institutes willing to provide mortgage refinance loans at lower interest rates, in case the borrower is willing to pay back the loans after being in a Chapter 13 case for at least 6 consecutive months. The process of Chapter 13 refinance is also known as bankruptcy buyout. In this way, one can easily get discharged from bankruptcy and resume the process of rebuilding credit scores.
In order to obtain a bankruptcy buyout, the borrower needs to seek permission from the specific US Bankruptcy Court where the bankruptcy application was filed. It is important to consult an experienced attorney who will advise you and guide you through the process.
However, not everyone who has incurred debts can file a Chapter 13 bankruptcy. There are certain criteria that need to be fulfilled so as to file for Chapter 13. Chapter 13 bankruptcy is ideal for those who have a steady employment and regular income so as to repay some or the entire debt. Limitations include low income, irregular income, unsteady employment and a high debt burden.
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Chapter 13 And Mortgage Refinance