If you own a home when you file for bankruptcy, it becomes part of the bankruptcy estate, the property or assets you own. In October of 2022, there was a twenty-seven percent increase in chapter 13 bankruptcy filings over the previous year. Bankruptcies, including all chapters, total a seven percent increase overall, which correlates strongly with the seven percent increase in inflation. Many homeowners are overwhelmed by their debt. As financial issues due to circumstances beyond their control changed their ability to pay creditors, they find they have no option but to claim bankruptcy, which can stop a foreclosure on their primary residence.
Those with secured and unsecured debts totaling less than $2,750,00 are eligible for chapter 13. However, chapter 7 is a liquidation process in which the trustee sells your assets to pay debts based on your total income, debt, and ability to repay. Often, these homeowners want to sell their houses to solve at least some of their financial difficulties but wonder if it is possible during bankruptcy proceedings.
While the rules for the process may differ for the type of bankruptcy you file under, and many factors influence the final determination, for most homeowners, the short answer is yes. So read on as we explore how to sell your house during bankruptcy in New York. Please note that this article is for informational purposes, not financial or legal advice.
Court Permission
You’ll need to file a motion with the court for leave to sell real property or approval to sell your house during bankruptcy in New York. You will want to include the selling price, your plans for the proceeds, and names of creditors holding liens on the property. This motion allows your creditors and any trustee to object, with the court determining the disbursement of any funds.
Contingency
In a traditional sale, you’ll need to add a contingency clause to the contract to sell your house during bankruptcy in New York, stating that the sale is contingent upon obtaining bankruptcy court permission. However, under chapter 7, the trustee may determine to sell the house if your home has high unprotected equity under your bankruptcy exemption. With the funds, the trustee pays any secured debts like the mortgage, provides you with the exempted amount you are entitled to and then satisfies any unsecured creditors with a pro ratio share of any remaining funds.
Proceeds
You may wonder what happens to any proceeds after the mortgage is satisfied when you sell your house during bankruptcy in New York. Of course, much will depend on your homestead exemption. However, the proceeds will likely go towards paying any remaining unsecured creditors or paying for the bankruptcy case.
Planned Payments
Under chapter 13, if you sell your house during bankruptcy in New York, you will need to modify your planned payments. Depending on the realized sale value, you may pay your plan off earlier as the proceeds go directly towards the bankruptcy.
Itemized Payoff Statement
To ensure no fees remain to surprise you after you sell your house during bankruptcy in New York, you should request an itemized payoff statement.
Homeowners Resource Group, Inc.
Don’t hesitate! With competition still driven by low supply and rising interest rates on the horizon, now is the time to cash in on your house, and the best way to sell your house during bankruptcy in New York is to sell directly to the cash investors at Homeowners Resource Group, Inc.. Our policy at Homeowners Resource Group, Inc. is full transparency through every step of the process because we want you to decide which sales method works best for your situation. To that end, a cash investor from Homeowners Resource Group, Inc. will detail your expenditures and potential profits from a conventional listing with an agent, vs. our offer, which you’ll agree is fair. At Homeowners Resource Group, Inc., we do this because we are your neighbors here in New York, we care about our community and the people in it, and we want you to feel good about working with us long after the deal is closed.
The seasoned pros at Homeowners Resource Group, Inc. have experience with sellers going through bankruptcy and have the solution you seek, providing you with a guaranteed closing date, charging no commissions or closing costs with no unpleasant surprises. If you’d like to avoid the work and out-of-pocket costs of prepping your house to list on the New York real estate market, a direct sale to the cash investors at Homeowners Resource Group, Inc. is the solution. The cash investors at Homeowners Resource Group, Inc. never charge commissions, and there are no hidden fees. So you can put your wallet away and relax; you won’t even need to worry about showings when you make a direct sale to a cash investor from Homeowners Resource Group, Inc.. For a no-hassle sale of your home during bankruptcy: a cash investor from Homeowners Resource Group, Inc. will buy your house directly, as-is, for cash. Call Homeowners Resource Group, Inc. at (631) 759-4408.