Can I Refinance My VA Loan With A Chapter 13 Bankruptcy?

One of the alternatives for getting out of a financial jam associated with your house or a repossession is a Chapter 13 bankruptcy. A chapter 13 bankruptcy is a structured payment plan to your creditors where you make a payment to a Chapter 13 bankruptcy trustee and they in turn pay your creditors according to a plan. Typically Chapter 13 payment plans last anywhere from 2-5 years depending on the severity of your situation. For more information on this program you will need to consult with an experienced bankruptcy attorney.

You may be one of those people who think that bankruptcy is a life long problem for your credit and that you’ll never be able to refinance or get a mortgage after the fact. Well this is simply not true. It is especially not true if you are one of the fortunate ones to have a VA loan and you want to refinance.

There two ways to think about refinancing your VA loan with a Chapter 13 bankruptcy. First you can consider it from the perspective of that it is completed. If this is the case, then you are most likely fine to refinance with either a full refinance or a streamline refinance. For either loan program you will be able to take advantage of low streamline VA rates. Next, if you are currently in your Chapter 13 bankruptcy then you’ll need to know the date of your first payment to your trustee. You’ll have to wait 1 year from your first payment to be in a position to qualify.

If you are over a year on your Chapter 13 payment plan you will also need to have not missed any payments to have any shot at qualifying for a VA loan. Incidentally, this requirement applies not matter whether you have a VA loan and you are looking to refinance or if you are looking to buy a home. Best thing to do if you are in a Chapter 13, or are considering it, you should talk to a VA loan officer to get all of your options and time frames.