Paying Off

• If you want to speed up when your Chapter 13 bankruptcy will be discharged so that you can begin rebuilding your credit, you can refinance your home and use the equity in your home to pay off any of the debts that are part of your refinancing plan. Look for a bank that offers favorable rates once you have been making regular payments on the repayment plan for at least six months.
  
  

Subprime Mortgages

• Your bankruptcy case will appear on your credit report, so you will only be able to get a subprime loan. Once a bankruptcy filing shows on your credit report you become a higher credit risk until it is removed after seven years. Subprime loans offer higher interest rates than other available loans available. Unless you took out your original mortgage when the rates were high, you will probably have difficulty finding a better interest rate.
  
  

Eligibility

• The balance on your mortgage and the debt that you are repaying as part of your Chapter 13 repayment plan needs to be less than 70 percent of the value of your home in order to find a subprime lender. According to Bankrate.com in May 2011, your interest rate will be around 18 percent. It is unlikely that that represents a better deal for you. The monthly payments would be unnecessarily high, which could get you so behind in your payments that you could lose your home. This would leave you in an even worse financial position.
  
  

After Discharge

• Once your Chapter 13 bankruptcy case has been discharged, it will still show on your credit report for seven years, making it harder to get the best rates on any credit or loan accounts. Rebuild your credit where you can. Don't miss payments on your repayment plan. Get a secured credit card and make small purchases and pay them off regularly. This will also help re-establish your credit. Hold onto that card once you qualify for a card with better rates, but you don't need to use it. Having older credit lines open also helps improve your credit score. Once your bankruptcy is off your report, you will be able to get better rates plus you will have more equity in your home.