It used to be much easier to refinance / buy out of Chapter 13 bankruptcy. With the subprime loan crisis, it is more difficult for the lender to sell subprime paper. As a result, many lenders have closed and others no longer offer a Chapter 13 purchase. However, a capable mortgage lender still has the ability to help many people buy a Chapter 13. Your chances of success increase if you a) have equity in your home, b) have a history of at least 12 months with no late mortgage payments, and c) have been in Chapter 13 for at least one year

There are not many lenders who specialize in these types of loans, and you are likely to be more successful if you find one that specializes in bankruptcy-related acquisitions. The loan officer will guide you through the process. This will include coordinating with a Chapter 13 attorney to obtain permission from the court. In most jurisdictions, this is not a problem and will be granted easily.

The benefits of getting out of Chapter 13 are many and include lower monthly payments, faster credit improvement and avoiding Chapter 13 expenses, and hidden costs from creditors and attorney’s fees that add up quickly.

A competent Chapter 13 refinance specialist will help you navigate through all the required Mortgage Verifications. He or she will know the tricks of the trade and help you solve problems you may have, like late payments in second trusts.

It used to be common for Chapter 13 refinancing. Acquisitions will be fixed for just two years. These programs, for the most part, have been discontinued and now the mortgage will generally remain fixed for at least 5 years.