Can I Purchase a House While in a Chapter 13 Bankruptcy?

While in a Chapter 13 bankruptcy, you must get permission from the bankruptcy Trustee to incur any new debt. This includes a mortgage if you want to purchase a new house. When you are serious about buying a new home within a Chapter 13 bankruptcy, you should let your bankruptcy lawyer know. They will get in contact with the Trustee for you and let him or her know that you would like permission to incur debt. They will file a motion with the court for this. Once the trustee makes a decision, the attorney will let you know.

Young Family with Children in Front of Home

Obtaining a new mortgage while in the middle of a Chapter 13 bankruptcy may be difficult, depending upon your situation. The longer that you are in a Chapter 13 bankruptcy and making your monthly payments on time, the more likely a lender will be willing to give you a better interest rate in a mortgage. Be prepared to shop around a bit. There may be some lenders who will not give a new loan to someone who has recently filed a Chapter 13 bankruptcy. Be patient, we find a lot of our clients will get pretty decent mortgage rates about a year and a half to two years after filing bankruptcy.

Also beware that many people have to have a decent amount of money up front for the purchase of a house. That may be for a down payment on the home or for closing costs. The bankruptcy courts are going to want to know where you came up with that money. If you have been able to save that amount over time then they may feel the need to increase your monthly Chapter 13 payments. Most of our clients get the money from the support of family.

If you are interested in getting a new house while in a Chapter 13 bankruptcy you need to contact your bankruptcy lawyer. They will help guide you through the process and will be able to let you know whether they think the bankruptcy judge will approve your Motion to Incur Debt so you can get the financing necessary to purchase the home.

3 replies
  1. Linda lightner
    Linda lightner says:

    I understand what you are saying that it will be hard, do u think that I might need to have a consign just in case. But I never had a home. I am in cht13 bankruptcy, I will be finishes in a year and six months. There are people out there calling me telling me they can erease that bankruptcy and three other things off my credit. Please advise me

    • Damon Duncan
      Damon Duncan says:

      Three things:

      First, don’t trust the folks who are calling you. They can’t do anything you can do on your own.

      Second, if you are currently in a Chapter 13 bankruptcy you should contact your attorney to get specific instructions because you likely need to get court permission before getting any financing.

      Third, a cosigner will probably help you obtain a loan and keep the interest rate as low as possible. I’m not sure it would be a good deal for the person doing the cosigning but it will certainly help you get the financing if that is the direction you choose to head. Good luck!


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  1. […] Carolina bankruptcy lawyer Duncan Law writes that, while buying a home during a Chapter 13 bankruptcy may be difficult, it is possible if (1) you can find a lender who will give you a loan, (2) you can […]

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