Expert: Dick Dennis - 4/22/2010

Question
Is it possible to purchase a home with bad credit and a chapter 13
Bankruptcy process going on . I just sold a house and only cleared about $12,000 and I can also borrow about 13,000 on my 401K toward the purchase of a home. The bad part is I have been in a hardship program over creditcard debt and I still owe $92,000 in credit card debt. After speaking with a couple of Attorneys I was advised to do a Chapter 13 because I would be dead before I would ever get the creditcard debt settled. I am an honorably discharged veteran and was wondering is there any hope for me to once again own a home . I was a home owner for almost 24 years and always had good credit until I got myself in a bind with credit cards.

Answer
First thing I would do, John, is to ask two more bankruptcy attorneys about doing a Chapter 7, wiping out your debts altogether and starting all over again. You can convert your bankruptcy. Just ask. With either form of bankruptcy, it still puts you in the same financial toilet. However, with the capability of scrounging up $25,000 as a down payment, my bet is that you'll be able to buy a house up to $125,000 in value, if not now, then surely within 2 years, I don't care what they're telling you. I know, I did it 23 years ago.

There is another way of buying a house. Find a house that the owner is able to carry the mortgage for up to 5 or 7 years. That $25,000 would help you find that house immensely. It would be a great opportunity for you to get back on your financial feet . . .especially if you stay up to date with your mortgage payments. You might even be able to find someone willing to sell their home to you on a lease and option. You would want to have a Realtor who knows about those and is not afraid to wait a little while for his/her commission.

Somewhere, someplace there's a homeowner who would be willing to sell to you under the above conditons and terms. Just don't try to be too choosey. Certainly after those 5 or 7 years you'll be able to get a regular bank or mortgage broker loan to pay off the seller. Now, if you can find that very knowledgeable, good real estate BROKER to help you in your goal, you'll be on your way. I do wish you well.

Dick Dennis
dixiedee13@aol.com