Selling a property while in bankruptcy may help you cope with overwhelming debt, but you need to ensure that you follow legal processes and work well with the bankruptcy court and trustee. This article equips you with the knowledge and information you need to make the right moves when selling a house while in bankruptcy.
Chapter 7 bankruptcy, commonly referred to as liquidation, involves the sale by the bankruptcy trustee of any property the debtor owns that exceeds the applicable exemption limit.
What Is Chapter 9?
This type of bankruptcy is filed by local governments or municipalities to get protection from creditors while they reorganize their debt and develop plans to achieve financial stability.
This type of bankruptcy is most often used by businesses to allow them to remain in control and continue regular operations while reorganizing assets and paying creditors over time.
Chapter 12 bankruptcy provides relief to financially distressed family farmers and fishermen by allowing them to reorganize their finances and develop a plan to repay all or part of their debts over three to five years.
Under a Chapter 13 bankruptcy, a debtor with enough regular income proposes a three- to five-year repayment plan to pay back some or all of the outstanding debt to creditors.
This type of bankruptcy is specifically designed to deal with cross-border insolvency cases. It promotes cooperation among U.S. courts, foreign courts, and other stakeholders to ensure a fair and efficient administration of the proceedings.
You’ll be free to immediately sell your house after a bankruptcy discharge. Prior to the discharge, however, you will need to get the approval of the trustee and the bankruptcy court.
Work with your lawyer and file a Motion to Sell Real Property which includes detailed information about the selling price and how you’ll go about distributing the proceeds of the sale. A bankruptcy trustee also has the authority to sell your house to be able to pay your creditors. The trustee must also get the permission of the court for the sale.
You may proceed with selling your house while in Chapter 13 bankruptcy after you get the go signal from the bankruptcy trustee and the court.
Your attorney must file a formal Motion to Sell Real Property. Information on the home sale price and a proposal on how the proceeds will be disbursed to the creditors must be included. Notice must also be given to all your creditors. In most cases, the court will permit the sale if you benefit without causing financial harm to your mortgage lender.
Need to sell your home fast but are facing bankruptcy? Los Angeles House Cash Offers can help you with a simple and convenient approach to deal with your situation.
Our experience working with hundreds of clients in Los Angeles, California and the surrounding areas shows that we can take the property off of your hands quickly and efficiently.
Can’t pay for the renovation that your condo, townhouse, or apartment needs? We’ll make you a fair cash offer on your property as-is. We buy all types of properties in any condition so you don’t need to worry about the cost of repairs.
We streamline the sale process to help you avoid the stress and expenses that come with unnecessary delays. We typically close deals within 3 to 30 days. Working with us means you’ll be able to save time, money, and energy while benefitting from a hassle-free sale.
We have resources that we can readily use to buy your property quickly for cash. We won’t have to wait around for approvals from the bank to make purchases. You won’t have to suffer the drawbacks of a buyer backing out at the last minute because the loan got rejected.
We’ll take care of each step of the process so you won’t have to go through the hassles of dealing with a lot of paperwork. Plus, we’ll only do one brief walkaround of your property to make an evaluation and give you a fair cash price.
Selling to us allows you to get the certainty of a cash offer without any hidden fees or commissions. We’ll give you a free evaluation of the property. We’ll also cover all closing costs and any other expenses associated with the transaction.
Selling property before filing for bankruptcy is allowed in certain cases but the task can be very risky. It all boils down to following certain guidelines, accomplishing important paperwork, and doing the sale for legitimate purposes. Fraudulent transfers – or those that involve selling your property in an attempt to avoid paying creditors – come with severe consequences.
The best way to go about it is to seek bankruptcy protection and get the approval of the court for the sale. Once you obtain permission, we’ll help you with a simpler and faster way to sell your property.
There are certain circumstances when a short sale during bankruptcy may be a good option, but it’s essential that you seek the guidance of an experienced lawyer who can better evaluate your situation. You will need the approval of the trustee and the court overseeing your case. Creditors will also have to review your short sale proposal to see if they will object to it or not.
We’ll make the short sale process more convenient for you by streamlining it and ensuring that leading short sale processing companies will closely work with the bank to close the deal.
How soon a debtor can sell their property after filing for bankruptcy varies from state to state, so it’s best to check the specific laws governing your area. Sometimes, a court permits the sale of the property 30 days after the debtor files for bankruptcy. Other cases may take the debtor between three to six months after the filing of the case before he or she can sell the property.
Contact us as soon as the bankruptcy court permits the sale and we’ll help you close a deal as soon as possible.
In a Chapter 13 bankruptcy, the trustee receives a percentage of disbursements made to creditors according to your repayment plan. The trustee may collect a maximum commission of 10% and uses the funds to cover the costs of running the office and administering the case.