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Can I buy a house while in a Chapter 13 bankruptcy?


First, you must obtain advice from your attorney, permission from the Trustee and the Court before embarking on this adventure. Some predatory lenders will be happy to charge you very high interest rates to buy a house. The longer you wait in your chapter 13, the better interest rate you can get. After 18 months of perfect payments to your Chapter 13 Trustee and to your mortgage lender, then most good lenders will extend a new loan. HUD underwriting rules state that the person in Chapter 13 bankruptcy can purchase a home and have FHA insurance. Requirements are that the applicant must have completed one year of payments as required while under Chapter 13. The applicant must then obtain a letter from the Trustee of the court, stating the dollar amount the applicant can borrow.


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