Can I Still Sell My House Fast During Bankruptcy?
Yes, you can still sell your house fast during bankruptcy or foreclosure. However, the court must approve any house sale. Fortunately, courts approve most sales because they pay the debt to the lender. You are also more likely to get approval for a house sale if you sell your house for cash directly to a pre-qualified buyer.
A cash home sale may also help you raise quick cash to pay off other debts such as a car loan or credit card balance. Since you do not have to go through the steps you would normally go through in a traditional sale, you can close the sale within seven to 21 days. If you sell your house fast enough, you may be able to prevent bankruptcy from going through.
Preparing to Sell Your House During Bankruptcy
Most states will allow you to sell your house as-is for cash to either avoid or satisfy bankruptcy proceedings.
If you want to sell any property, you must first contact your bankruptcy attorney to determine the appropriate course of action. Most sales require advance permission of the Bankruptcy Judge, and your attorney must file the appropriate motions to receive the Judge’s approval before the sale can proceed. So, consult your attorney before you sell any property.
Most likely, your attorney will need to file a legal pleading with the Bankruptcy Court, which will outline the following:
- What you want to sell
- Who you are selling it to
- The sales price
- Proposed closing date
If you are selling your house, information on how you found the buyer will be helpful for your attorney. For example, a home is typically listed with a realtor. However, if you plan to work directly with the buyer and sell your house for cash, you must notify your attorney and the court.
What You Should Know When Selling Your House During Bankruptcy
If you have a good bankruptcy attorney, they will be able to work out the details of your cash home sale, leaving you with very little to do or worry about. However, there are some things you need to know if you try to sell your house for cash.
Inform All Parties
Whether you’re in the middle of a bankruptcy proceeding or years into your repayment plan, notify all relevant parties when you plan to sell your house. Relevant parties may include
- Your bankruptcy attorney
- The mortgage lender
- The bankruptcy court
- Any affected family members
You should inform anyone with a vested or legal interest in the property.
Don’t Delay Selling Your House
Delaying a cash home sale can put your plans in jeopardy. Fortunately, closing the sale is quick. A local buyer can typically close a cash sale in seven to 21 days. You will need to give your attorney and courts the power to process the sale and discharge the debt.
Motion to Sell
The motion to sell is a legal document that contains your intent to sell if you’re trying to sell your home while in bankruptcy. The motion-to-sell documentation should include the sale price of the home, the home’s value, the home appraisal to validate the home’s value and a proposal for distributing what you get from the sale.
The proceeds are applied to paying off the mortgage and closing costs in most cases. This is the document your trustee bases approval upon. If the trustee approves, the sale can go forward.
Statement of Sale
Once you’ve closed on the home, you will need to provide your attorney with a copy of what is called the statement of sale. As the motion to sell, this document is important to get to your trustee as soon as possible.
The statement provides the home’s final sale price, any closing-related deductions, and how much is leftover from the sale. Also, at this time, you are required to make any payments the trustee ordered during the motion to sell phase.
Discharging the Debt
If the home’s sale can pay off your repayment plan, then you can expect a discharge of your Chapter 13 shortly after the sale. The trustee will order the discharge, which will be signed by a bankruptcy judge and sent to you in the form of a final decree. This document is important to keep, proving you are out of bankruptcy.
Call Today to Schedule a Quick Walkthrough
If you need to sell your house fast and need help, Local Guy Buys Houses can buy your house right now. We buy houses as-is. Call us today at 855-205-5999 to get a fast cash offer.