- January 22, 2013 at 2:57 am #653583
I am currently in a chapt 13 plan I am about 2 years in now this Nov. I am trying to refinance my home of 6 yrs, My currently lender tried to refinance me under the HARP program but when my Chapt. 13 came up it fell apart. Any lenders out there that will take my situation on??
- January 22, 2013 at 2:57 am #918618
You’re joking, right?
Permission To Borrow Money
The whole idea behind Chapter 13 is to get you out of debt. Hopefully, when you are done making your last payment to the trustee, you owe no one any money (with the possible exception of mortgages and student loans and other nondischargeable debts not paid in the plan). That is why the law generally does not permit you to incur debt while you are in Chapter 13. However, sometimes you need to incur debt – for example, if your car quits running. Other examples are if you go back to school and want student loans, or if you decide to buy a house.
In the case of a vehicle, you may need to replace one that is being paid in the Chapter 13. If that is the case, then you need to decide whether to trade it or not. First, find out what the balance owed through Chapter 13 is (call us & we will find out for you). Then find out how much the dealer will give you on a trade (or how much you can sell it for). If you can get more out of it than the balance, it is better to trade it. If you cannot get that much out of it, we will ask the court to permit you to surrender the vehicle and eliminate it from the plan. Fill out the appropriate information in the form below.
The procedure is as follows:
Find a lender who will work with you and agree to provide financing if it is approved by the court (many car dealers will provide financing in-house – we do not keep a list of lenders; you are responsible for hunting one down). Note: some car dealers will tell you they just need “a letter from the trustee” or “a letter from your lawyer”. This is not correct – you cannot do it without a signed order from the court.
Fill out the form below and submit it by email, mail, fax, or by dropping it off at the office. Do not call the information in – it must be in writing!
After you do so, we will draft the motion to incur debt. We must mail copies to all creditors, and give them 20 days after mailing to file an objection with the court. If an objection is filed, the matter goes to a hearing in front of the judge, usually within 30 days. If no objection is filed (and 90% of the time, there are no objections), we will draft an order and send it to the trustee. He will sign it and forward it to the judge for his signature. It is then transmitted to the clerk’s office, who will mail copies to you and to us (we get our copies the same time you do).
Sometimes, the trustee will want us to submit a new budget showing you can afford the payment. If you are contacted to do this, do it as soon as possible, because the trustee will not approve the order until he sees the new budget.
Once you have received the signed order, then take it to the lender and complete the transaction. Many times, in a vehicle loan situation, the vehicle you wanted is gone by the time the process is completed. That is why Mr. Cloon puts language in the order that allows you to purchase a similar one at a similar price.
Your payments on the loan will be outside the plan. It is not included in your plan payment. If you do not make the payments, they can and will repossess the car and sue you, just as though you were not in bankruptcy. If you quit making your Chapter 13 payments, your case will be dismissed. The Trustee will not allow you to quit making payments to him in order to make your loan payments.
There are additional attorney fees associated with this modification. If no objection is filed, the fees are usually $ 180. If an objection is filed, the fees will be more depending on the length of the hearing and any extra work that may be required. You do not have to pay these in advance. We will file a fee application with the court, and will be paid out of the payments you make to the court.
- January 22, 2013 at 2:57 am #918619
Banks have regulations in place to re-finance you if you quality.
If you fail with one, you will fail with others.
And don’t fall for scam sites that promise you otherwise.
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