How do I Refinance During Bankruptcy?

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  • Written By: Patrick Roland
  • Edited By: Kathryn Hulick
  • Last Modified Date: 21 August 2019
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It is not always simple to refinance during bankruptcy, due to your already damaged credit, but the process is not impossible. By meeting with your bankruptcy attorney, researching mortgage companies, creating a budget plan, then going to bankruptcy court again and garnering a trustee's approval, you can lower your monthly payments. Commonly, this technique is used to ease payments on homes, but can also be applied to cars, boats and other assets.

The first step to refinance during bankruptcy is to meet with your bankruptcy attorney. He or she will have all of your financial history and will be able to provide insight and recommendations about the best refinancing options in your case. Not everyone going through bankruptcy will be eligible for refinance programs, so it is important to provide all necessary materials and documents to the lawyer.

If your attorney believes you are qualified to refinance, your next step is to find a creditor willing to work with you. Your financial history is not optimal for loaning money, so creditors can be difficult to locate in order to refinance during bankruptcy. Contact banks and commercial loan organizations and ask the loan officer on duty about working with clients currently going through bankruptcy. If you are fortunate enough to find multiple lenders willing to work with you, compare each organization's rates and terms to find the best way to lower your monthly payment.


Most bankruptcy filers must work out a budget plan with their attorney. Once you have located a lender, meet with your attorney again and go over the possible impact of this refinance during bankruptcy procedure. This is an opportunity for you to revise your budget plan to reflect the change in monthly payment.

Next, you must file a motion in bankruptcy court. Your attorney will likely handle this portion of the refinance. Be aware that there is a court cost involved in a motion that will be added to your monthly bankruptcy payments.

Finally, you will need to make another trip to court after you have contacted the bankruptcy trustee in charge of your case. This person will first review your new budget plan to ensure it meets up with all laws and regulations. In court you will be required to prove you have the financial means to refinance during bankruptcy. If the judge and trustee approve, your process will be over and the refinancing will be allowed to go through.


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