Found an issue on this page? Let us know and we will look into it as soon as possible.
Can I buy a home shortly before bankruptcy
Anonymous11 views5 answers
I am most likely going to file for Chapter 7 bankruptcy in the next couple of months. I will be filing for divorce sometime after the bankruptcy and neither of us are going to be in my current home. I'm checking to see if it's lawful to purchase a home prior to filing. The rental properties I could afford are in bad neighborhoods, and the others are too expensive. My credit score is good as is my debt to income ratio. My current mortgage payments are up to date. If I get approved for a new home prior to filing for chapter 7, can that home be taken from me if I don't have any equity in the home? My current home will be foreclosed when I go into chapter 7.
Robert W GambrellChapter 13 Bankruptcy AttorneyOxford, MS ·
The problem with your debt to income ratio is the fact that the monthly payment on your current mortgage will count as an additional monthly payment, along with the monthly payment of your new mortgage, you auto loans and any other monthly debt obligations that you have. If considering all of that, you can qualify for a home, then there is no problem in purchasing a home and finance it as long as you intend to reaffirm that debt.
Assuming you can qualify, there is no real problem with purchasing a house before a chapter 7 filing. A trustee would look at any real property you owned to make sure there is no equity, so that could cause a problem if you put a lot of money down. Otherwise, you should make sure that you have made a payment or two on the house, and are current when you file chapter 7. Also, avoid any of your creditors getting a judgement against you before you file chapter 7, as that could attach to the equity in the home as well. I advise seeing a bankruptcy lawyer sooner than later, and do some pre-bankruptcy planning to get some advice specific to your circumstances.
Michael David BirchmoreDUI / DWI AttorneyBlue Ridge, GA ·
No no no. You need to remember that filing bankruptcy (after you obtain a mortgage) is one of the listed events that would declare your mortgage in default. When default occurs, the bank will accelerate your loan, and it will be due and payable immediately.
Although I agree with the advice provided here, do not file for bankruptcy without meeting with a bankruptcy attorney. From the facts provided here, you can afford to meet with one. You need to discuss with the bankruptcy attorney the pros and cons of filing wither before the divorce, or after the divorce. I met with a client recently that should have filed for bankruptcy while he was still married and he and his wife could use the homestead exemption. His case got unnecessarily complicated because he did not consult with an attorney to make an informed decision. We only get very limited facts here on , so we can't always give you the best advice tailored to your situation. PLEASE meet with a bankruptcy attorney.
