Refinancing during bankruptcy is possible by meeting with a bankruptcy attorney, researching lenders, creating a budget plan, and getting approval from a trustee. It can be used for homes, cars, boats, and other assets.
It’s not always easy to refinance during bankruptcy, due to your already damaged credit, but the process isn’t impossible. By meeting with your bankruptcy attorney, researching mortgage companies, creating a budget plan, then going back to bankruptcy court and getting approval from a trustee, you can lower your monthly payments. Commonly, this technique is used to facilitate payments on homes, but it can also be applied to cars, boats, and other assets.
The first step in refinancing during bankruptcy is meeting with your bankruptcy attorney. He or she will have all of your financial history and be able to provide information and advice on the best refinancing options for you. Not everyone going through bankruptcy will be eligible for refinancing programs, so it’s important to provide all the necessary materials and documents to your attorney.
If your attorney thinks you’re qualified to refinance, your next step is to find a lender willing to work with you. Your financial history isn’t optimal for lending money, so lenders can be difficult to locate to refinance during bankruptcy. Contact banks and commercial loan organizations and ask the loan officer on duty to work with customers who are currently in bankruptcy. If you’re lucky enough to find multiple lenders willing to work with you, compare each organization’s rates and terms to find the best way to reduce your monthly payment.
Most bankruptcy filings need to work out a budget plan with their attorney. Once you locate a lender, meet with your attorney again and look into the possible impact of this refinance during your bankruptcy proceedings. This is an opportunity to revise your budget plan to reflect the change in your monthly payment.
Next, you need to file a motion in bankruptcy court. Your attorney will likely handle this portion of the refinance. Keep in mind that there is a court cost involved in a motion that will be added to your monthly bankruptcy payments.
Finally, you will have to make another trip to the court after contacting the bankruptcy trustee in charge of your case. This person will first review your new budget plan to make sure it complies with all laws and regulations. In court you will be required to prove that you have the financial means to refinance during bankruptcy. If the judge and trustee approve, the process will be over and the refinancing can be completed.
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