Can I sell My House In Bankruptcy in Fort Worth
Once you file for bankruptcy, all your assets are a part of the bankruptcy case. If your creditors can’t foreclose your property as it’s shielded by bankruptcy protection, neither can you sell the property without the permission of the bankruptcy court. At this point, the trustee can gain approval from the bank to sell your home to satisfy your debts. Depending on your income group, bankruptcy is filed under different chapters Precisely Chapter 7 and Chapter 13. Chapter 7 essentially implies the liquidation of assets, making it difficult to sell the property without involving the bankruptcy court. And that too, the permission is granted to a court-appointed trustee with a view for the repayment of the debt through sale proceeds from the property. Chapter 13 can be further defined as reorganization. That permits you to sell your house or keep it as you like. Provided that it doesn’t cause any harm to the mortgage lender. But you need to get permission from the court-appointed trustee before you start with refinancing or the selling process.
Then comes the question of when to sell? Before that, you need to file a formal motion to sell the property with the bankruptcy court. With a complete list of the necessary disclosures like sale price, list creditors with liens on the property. You need to provide detailed information to the court about the future allocation of the sale proceeds. Usually, a court-appointed trustee believes that selling the property is the best option to satisfy the creditors. Trustees must provide all the information about the sales and allocation of sale proceeds. In many states, part of the home’s values may be “exempt” property, reducing the possibility of a trustee’s requested sale.
How can you sell your property in Chapter 13 bankruptcy? Whether you decide to sell your property on the next day of filing your bankruptcy or years into repayment, you have to notify your attorney as there’s a great deal of paperwork to be completed before beginning the selling process. The attorney has to inform the bankruptcy trustee to put the documentation together. The real estate agent should also be advised that you are in Chapter 13 bankruptcy. If your trustees disapprove of the sale, provide leverage of 30 to 45 days to your attorney to get things in order with the trustee. Meanwhile, the attorney can put the paperwork in motion. The creditors can create hindrance in your sale process the same way as they have the right to object to the repayment option. A particular document called motion-to-sell is required to move forward with the sale. The document essentially consists of a proposal for distributing what you get from the sale, the home appraisal to validate the properties value, the exact value of the property, and the property’s sale price. Once this is done, and the deal for the property is closed, submit the sale statement as soon as possible to the attorney. This document has all the necessary information about the deal’s final price and the sale proceeds’ excess amount. After that, it would be good to make any payments to the trustee ordered during the motion-to-sell phase. If the property sale proceeds are enough to pay off the debt, then your Chapter 13 is discharged shortly. A document is issued by the trustee and signed by the bankruptcy judge and sent to you in a final decree. This document should be preserved as it proves that you are officially out of bankruptcy. In case you need any assistance with this complicated procedure, contact us!