Can I Sell My House During Bankruptcy?
If you can no longer pay your mortgage or other debts, you may decide to file for bankruptcy to ease the burden of your monthly bills. While bankruptcy does provide a solution for debt reduction or consolidation, it can also affect your credit and keep you from buying a home any time soon. Instead of filing bankruptcy, you may want to consider a smarter alternative.
For instance, instead of keeping the house, you can sell your house as-is for cash to pay off your mortgage and debts while avoiding bankruptcy altogether. Even if you go through with a bankruptcy, you can still work out a deal with the bank trustee to sell your house during the process. Below, we look at how you can sell your house fast during bankruptcy.
Is It Legal to Sell My House During Bankruptcy?
You might want to sell your home while you are in bankruptcy if you are upside down on your mortgage with no equity or if it is a second property that you are struggling to pay for. When you are going through Chapter 13 bankruptcy, all your assets belong to the Chapter 13 estate being managed by the trustee assigned to your case.
While you keep your assets during bankruptcy, you have no control over them. This means that you can’t sell or refinance any of your assets, including your home, without the trustee’s permission. Therefore, you need permission from the court and your bankruptcy trustee to sell your house fast.
What is the Process of Selling My House During Bankruptcy?
When selling your house during bankruptcy, most courts follow a step-by-step process.
Obtain Permission from the Court
The bankruptcy court must approve the terms of the sale before a debtor closes on the property. This means that you will need to make sure the contract for the sale of your home includes a provision that states that the sale is subject to the bankruptcy judge’s approval.
Notify Your Creditors
Your bankruptcy attorney must notify your creditors before the property is sold. Your creditors have the right to object to the sale of your house. They also have the right to object to your repayment plan.
Disclose Details of the Sale to Creditors and the Court
You and your bankruptcy attorney must disclose the details of the proposed sale to both the creditors and the bankruptcy court before you can proceed. Those details will take the form of a Motion to Sell and a Statement of Sale. You must file these with the trustee and court.
The Motion to Sell will include:
- Home’s sale price
- Appraisal proving the property’s value
- Details of how the proceeds from the sale will be disbursed to the creditors
The Statement of Sale will provide a detailed account of all deductions made and profits earned from the sale of the home. It will include your home’s final sale price, closing costs, how much your mortgage lender is paid, and the amount of any leftover funds.
Once the Motion to Sell is filed, the court will schedule a hearing to give creditors time to object. So, set a closing date after the bankruptcy court has approved for the sale. If the court approves the motion, the sale can proceed.
Proceeds Pay Your Creditors
All proceeds from the sale of your home become part of the bankruptcy estate. These proceeds must be paid directly to the bankruptcy trustee. The trustee will then disburse the proceeds to the creditors.
If the sale of your home allows you to pay off your repayment plan, you could have the bankruptcy discharged shortly after the sale. The trustee will approve the discharge, which the bankruptcy judge will sign. The final decree from the judge proves you are out of bankruptcy.
Request Your Fair Cash Offer:
How Do I Sell My House for Cash?
You may be wondering, “How do I sell my house fast?” We make it easy to get out from underneath your property in just three steps:
Step 1: Call Our Local House Investors
Call us today and schedule a quick walkthrough with one of our house buyers. We can assess your property to decide if we would like to move forward with a purchase. If so, we will make an offer within 24 to 48 hours. Do not worry about preparing or cleaning your property. We buy houses as-is.
Step 2: We Will Make a Fair Cash Offer
If we like what we see, we will make a cash offer on your house at just below its current market value. We will not try to buy your house at a rock-bottom price. Instead, our local house investors try to create a solution where everyone benefits. As local buyers, we understand the real value of your property in Ohio.
Step 3: We Pay You Cash
If you accept our offer, then you can schedule a close date that is convenient for you. In most cases, we can close in as little as seven days and have cash in your hand in only a few weeks. We pay all closing costs. You pay nothing. Simply walk away from your property with no strings attached.
Why Sell Your House for Cash?
If you need to sell your house quickly, you may be looking at different options such as a for sale by owner (FSBO), listing your house on the market, or selling your house to a local investor. While each has its benefits, there are distinct advantages of selling your house as-is for cash.
It is the Fastest Way to Sell Your House
If you are in a situation where you must get out of a mortgage, move, or sell your house to raise funds (such as probate), do not have time to sell your house the traditional way. On average, it takes 60 to 90 days to hire a realtor and sell a house on the market. If you sell your house for cash, you can close in as little as seven days and get cash in your hands in as little as 30 days.
You Avoid Selling and Closing Costs
You may try to sell a house to make a profit. However, by the time you pay out expenses and fees, you may lose up to 25 percent of your house’s selling price. Expenses may include:
- Closing costs
- Realtor commissions
- Preparing and showing the house
- Appraisals and inspections
All of these add up to thousands of dollars in costs that eat into your profits. Ask yourself, “Is it worth it?”
You Avoid Legal Hassles
You may be in a situation such as a probate, bankruptcy, or foreclosure where you are tied up in legal battles. Foreclosure can ruin your credit and keep you from buying another house for a few years. You may need fast cash to collect funds for probate. Or, if you are a landlord, you may have tenants you do not want to deal with. All these problems are easily fixed when you sell your house fast for cash.
Say Goodbye to the Hassle of a Traditional Sale
Selling a house these days can be a major hassle. You may spend countless hours renovating your home and getting it ready to sell. You must also put your house on the market, meet with the realtor, and repeatedly show your house to potential buyers. It can take up to 45 days to close. When you sell your house for cash, you bypass all the hassle. Simply sell your house as-is and walk away.
Sell My House Fast in Cleveland, OH
Before you contact the realtor or list your house on the market, do not pass up the chance to sell your house as-is for cash. Home Buyers Ohio is here to help you find the simplest solutions to get cash-in-hand quickly without wasting time and money on repairs and closing costs. To schedule a quick, no-obligation walkthrough with one of our local house buyers, call 440.490.4600.