I have a $10,000 judgement against me from an automobile that was repossessed in 2001 (this was renewed in 11/2011) - the vehicle would have cost $5000 to get it running again and I was out of work at the time. I have an additional dental bill for $1200 as well as miscellanious bills from my unemployment period and am thinking about filing bankruptcy to stop garnishments and creditor harassment.
Since that time, I have worked 9 years at the same company and am currently paying off my student loan and 2nd automobile loan.
However, I recently gained custody of my teenage son and the small one bedroom apartment no longer meets our needs. I now have some additional NET income since I am no longer paying child support for my 18 year old daughter who graduated lest month. The 2 bedroom apartments that I have looked into are running about $950 per month.
I would much rather put this money into a 2-3 bedroom house since the housing prices are low but are starting to make a rebound. I could borrow approximatley $6000 from my 401k to use towards a downpayment.
I am wondering if it would be feasible to buy a home prior to filing for bankruptcy - and claiming a homestead exemption while there is still no equity?