Can I pay off an EQUITY loan with an unsecured loan prior to filing bankruptcy?

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We got a home equity loan in June to consolidate credit card bills, another home equity line, and small construction loan. Things were fine until I was recently diagnosed with multiple sclerosis and declared disabled. I receive social security, which is currently one-half of my former salary, but only until my children graduate when it will drop to one-third. We now realize that we cannot pay for my graduate school loan (simple bank loan-not federal), the car loan, the equity loan, AND the home first mortgage. We can pay for a cheaper car and the first mortgage for the home, but not the equity loan too. Can I put SOME not all of the equity loan onto my unsecured loan to “pay it down” so that when we file bankruptcy we can afford to keep our home?

I’ve been married for 8 mo. now. I filed bankruptcy in 2005 & it will be two years old in Nov. 2007. My credit score is 638. I met with a mortgage broker & was told that if I get a mortgage now, it will be 10% down & 10% interest rate. If I wait until Nov., I was told I could get no money down & a 6% interest rate. I want to wait, but my husband has found a home that we have absolutely fallen in love with. My husband will be declaring bankruptcy for debts prior to our marriage within a month. Will I still get qualified for a loan now or in Nov., or will I have to wait until his bankruptcy is discharged or two yrs. old first? We have another broker saying he’ll qualify my husband as a first-time homebuyer, regardless of his credit, & add me as a co-borrower. I’ve owned a home in the past that never defaulted or went into foreclosure. We currently pay $ 675/mo. for a place we’ll never own. We own our vehicles & no debt expenses other than utilities, neccessities, & insurance.

  1. Reply
    February 12, 2011 at 4:53 pm

    You can re-afirm the mortgages. If a company finds out that you borrowed to then file a bk, then you may have to pay it any way. Talk with your atty about this course of action

  2. Reply
    February 12, 2011 at 5:13 pm

    call a bank and talk to a mortgage specialist or loan originator, they would be able to give you better advice than anyone here.

    sorry to here about you ms

    good luck

  3. Reply
    February 12, 2011 at 5:44 pm

    If you were to do that – you’d have to wait for approx 6 months to file – else, the trustee in bankruptcy court might have a problem with what you’ve done & create havoc for you.

    Certainly you could reaffirm the loans, but if you can’t afford it now, you might not could afford it then either.

    Depending on the amount of income the petitioners have, guides in what chapter you can file now. Petitioners are those that file: If it’s you only – your income; if it’s you & a spouse – it’s the combined incomes.

    When the bankruptcy law was revised in October 2005 there became certain qualifications that have to be met to dissolve debts by chapter 7s. If you are ableto repay – you would have to file a chapter 13.

    Good luck.

  4. Reply
    February 12, 2011 at 5:54 pm

    good luck i hope you get your loan. I don’t think his bankruptcy will look good.

  5. Reply
    shelton s
    February 12, 2011 at 6:43 pm

    There are Lender’s who can get you a loan rite after a BK it would be better to first get the house and then file. you can always re-finance in a couple of years.

  6. Reply
    February 12, 2011 at 7:21 pm

    I am a loan officer and the best way i see here is i can get you qualify and then you don’t have you put your husbands’ name on the papers. Later when his bankruptcy is discharged you can refinance and get his name on papers as well! This way you dont’ have to wait till Nov 2007 when you are out of bankruptcy!

    Mohit Madaan
    Loan officer

  7. Reply
    February 12, 2011 at 7:34 pm

    You are doing the right thing by consulting with a professional, but another thing you may want to do is simply walk into your bank and speak with a loan specialist. Ask them as many questions as possible and be honest about your situation. You will get free advice and you can compare what that person told you with whatever advice you received prior to your visit. Don’t be afraid to write your questions down and ask them. It is better to be fully informed.

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