Real Estate Agent · Jacksonville, FL · Member since 2016 · 11 posts · 4 votes
Bankruptcy will be discharged Jan. 2017. Our portfolio rentals consists of 8 single family homes & 2 four-plex apartments. After our discharge our portfolio will consist of 4 houses will have no mortgage & 1 four-plex with a very small mortgage (22K) @ low interest rate 5.25 % (25 years left with payment $145 a month). Our primary residence (value @ $350K) has a interest only mortgage with payments of $789 a month. Upon discharge, (Jan. 2017) this payment will definitely be amortized immediately. My question is where can we turned for help regarding a re-finance on our primary after a 60 month chapter 11 discharge. We really do not want to sell because we love this house. HELP! Any advice will be appreciated.
A four-year waiting period is required, measured from the discharge or dismissal date of the bankruptcy action.
Exceptions for Extenuating Circumstances
A two-year waiting period is permitted if extenuating circumstances can be documented, and is measured from the discharge or dismissal date of the bankruptcy action.
For FHA it's a 3 year wait from the discharge date and there's quite a few banks and lenders that will do portfolio loans after 2 years of the loan being discharged.
Real Estate Agent · Jacksonville, FL · Member since 2016 · 11 posts · 4 votes
10y
Hi Shaun, thanks for the information regarding the waiting time. I also heard that if you are a veteran (which my husband is) the waiting time is 2 years. I guess that I will have to liquidate some of my portfolio holdings so that I will some cash available. Right now my main focus is my primary residence after my discharge date (Jan. 2017). I have at least $125-$150K equity in the home and I really would prefer staying there another couple of years, maybe longer but I am sure that after my discharge the mortgage company from hell (NationStar) will immediately increase my payments. We got lucky and was able to include our primary in our Chapter 11 BK (should have been only the investment properties). So if we have to sell at least we will have some non-taxable funds to work with. Any ideas on this?
Loan Officer / Processor / Life & Health Agent · Rancho Cucamonga, CA · Member since 2014 · 1k+ posts · 757 votes
10y
Good Morning @Linda Cooper,
You are correct that VA does have a 2 year waiting period.
You would have to speak with a cpa in regards to the tax implications. I'm not sure how long you've owned these homes for so ask your cpa about capital gains tax and also see if a 1031 exchange is possible in your situation.
Real Estate Agent · Jacksonville, FL · Member since 2016 · 11 posts · 4 votes
10y
Shaun, IRS law allows $250K for a single person & $500K exclusion for a married couple on your primary home and you can do this every two years. We have occupied the home for 11 years. It is a great way to make a profit & not have to pay Uncle Sam anything. Maybe, we might consider moving and purchasing a nice fixer upper with a lease option to purchase in 2 years. Anyway I will keep you posted and enjoy your weekend. Thanks again for your advice and yes I have an awesome CPA. He was previously employed for the IRS.
Real Estate Agent · Jacksonville, FL · Member since 2016 · 11 posts · 4 votes
6y
My chapter 11 Bankruptcy will be permanent removed from my credit report in Sept. (2020) :-). I have a fico score of 801 & we (husband & I) just recently re-finance our primary through VA (Navy Federal C/U. The even better news is a lender has offer us a $1,000,000 fix & flip credit line to use but we're a little scared. That's a lot of money!! Would like to hear you guys thoughts on this. Thanks