First of all, what is “bankruptcy”?
Bankruptcy is a legal proceeding carried out to provide individuals or businesses relief from their debts, while simultaneously providing creditors an opportunity for repayment.
There are 2 main types of bankruptcy; chapter 7 and chapter 13, if you file a chapter 7 bankruptcy (liquidation of assets) it makes it difficult to sell a home. Therefore, if you want to sell your home during bankruptcy, you first must obtain the court's approval. If the court-appointed trustee wants to sell your home to generate cash for creditors, he or she must also get permission from the court. However, if you file for chapter 13 bankruptcy (reorganization) it permits you to keep your home or to sell it to pay for your debt without causing financial harm to your mortgage lender. However, you still must get permission from the trustee to sell or refinance your home while in chapter 13 bankruptcy.
Therefore, you can sell your house while you are in a chapter 13 bankruptcy, as chapter 13 does not prevent you for selling assets. That being said, selling any of your assets will require court approval. For that reason, you should seek advice from your bankruptcy attorney to ensure that any equity in your house has been exempted in your bankruptcy.
When should you sell your house during bankruptcy?
Should you want to sell your house, you will need to file a Motion to Sell Real Property with the bankruptcy court. All particulars, including the selling price and the names of creditors with liens on the property, must appear in the formal motion. You'll also need to give the court detailed information about what you want to do with the proceeds of the sale. The faster you submit this information, the faster it will take if you aim to sell your house quickly.
How to Sell My House Fast During Bankruptcy?
A bankruptcy trustee will help you through the necessary steps it takes to sell your house. The trustee will list the property for sale with a real estate broker and negotiate a price with a buyer.
In addition to listing the property for sale, the trustee must also:
· Receive a court endorsement in order utilize a broker
· Receive approval from the court for the sale subsequent to discovering a buyer, and
· Advising all tenants and invested individuals of the home that it may be sold so that they have the chance to protest the sale.
Once you complete closing requirements, you must file a statement of sale with your trustee immediately. The statement of sale includes:
· The home's final sale price
· Closing-related deductions
· The balance turned over to pay off the mortgage
· Any remaining proceeds from the sale
Once you’re done filing this document, the trustee will arrange any payments essential in order to complete the sale. You may have to pay lien holders, make initial payments on another home, or release your obligation if the supports cover the costs expected to take care of your Chapter 13 reimbursement plan.
If I Choose to Sell My House while in a bankruptcy, why choose Congressional Home Buyers?
Selling your house while you’re in a current bankruptcy can be a little hard; but Congressional Home Buyers will make it easy for you. Congressional Home Buyers is known for its best-in-class service when it comes to selling your home. Here at Congressional Home Buyers, not only will we provide you with superior service, we will help you maximize the sales price of your home, all while eliminating the headaches that come with selling your home.
Click here to if you are interested and see what we have to offer!