If you properly plan your bankruptcy you could make over 24,000 dollars instead of losing money every month to a 13.9% loan and paying over 78,000 for a 69,000 dollar home.   Presently in 2004 rates are just 5%.   Mortgage rates at just 1 or 2 % more are available even if you just filed a year ago.     

Why refinance a house when you owe 125% of what it is worth at double the normal rate?  You are far better off letting their home go back in foreclosure! You can only redeem personal property such as a car in bankruptcy you can't redeem a home.  It normally takes about 1-2 years for the foreclosure process to go through the state court.  You can sit in the house rent free during the foreclosure.  By filing a simple answer in your foreclosure you can probably extend the foreclosure by at least 6 months and in some cases up to 2-3 years before it will reach a foreclosure sale and you have to move.  It normally takes 2 years after a bankruptcy or 3 years after a foreclosure is finished before you can buy a home if you want a prime lending rate.  

 If a foreclosure is part of your bankruptcy and it is listed in the schedules it will take 3 years before you qualify for a prime mortgage.  The federal rule is that it takes 2 years after bankruptcy discharge or 3 years after a foreclosure sale.  It is essential that you use an attorney that knows and plans with you what to do.   In 2003 the lowest prime mortgage rate was about 4.5% for a 30 year mortgage in 2004 it is 5.5.  Higher rate mortgage companies will lend to you before 2 years but you should wait the two-three years to get the lowest rate which is called a prime rate.   There are B, C and D market mortgages but these are much higher rates and it costs dearly in the long run. 

Your bankruptcy alone can not be used to deny you a prime mortgage under FHA VA and other federal and state guidelines 2 years after discharge and 3 years after a foreclosure.   The myth that you can’t buy a home after a bankruptcy isn’t true.  During that year or two you can save up the 1000 a month you would have spent on house payments and apply it directly to the principle for a new home.  When just a year is over you would have saved up 12,000 dollars as a down payment if it takes 2 years to foreclose the home you would have saved up 24,000 as a down payment on a different 69,500 dollar home and it would be almost half paid for.