If you are a homeowner filing for bankruptcy, your home will become part of the bankruptcy estate, which includes all your property and assets. In October 2022, there was a notable twenty-seven percent surge in chapter 13 bankruptcy filings compared to the previous year. Overall bankruptcy filings across all chapters have increased by seven percent, mirroring the seven percent rise in inflation. Many homeowners are grappling with overwhelming debt, leading them to consider bankruptcy as a solution to halt foreclosure on their primary residence due to financial challenges beyond their control.
Individuals with combined secured and unsecured debts below $2,750,000 qualify for chapter 13 bankruptcy. On the other hand, chapter 7 involves a liquidation process where the trustee may sell your assets to settle debts based on your income, debt amount, and repayment capacity. Homeowners in these situations often contemplate selling their homes to alleviate some of their financial burdens, prompting them to question the feasibility of such a move 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 Tennessee. Please note that this article is for informational purposes, not financial or legal advice.
Court Permission
To sell your house during bankruptcy in Tennessee, you must file a motion with the court for approval to sell real property. This motion should detail the selling price, your intended use of the proceeds, and the identification of creditors with liens on the property. By filing this motion, you enable your creditors and the trustee to raise objections, with the final decision on fund distribution resting with the court.
Contingency
In a traditional sale, you’ll need to add a contingency clause to the contract to sell your house during bankruptcy in Tennessee, 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 Tennessee. 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 Tennessee, 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 Tennessee, you should request an itemized payoff statement.
Premise Home Solutions
Now is the time to take action! Seize the opportunity in a market where low supply and impending interest rate hikes drive competition. If you are considering selling your house during bankruptcy in Tennessee, selling directly to cash investors at Premise Home Solutions is your best option. At Premise Home Solutions, we prioritize transparency throughout the entire sales process, empowering you to choose the method that aligns with your circumstances. Our team at Premise Home Solutions will provide a comprehensive breakdown of expenses and potential profits associated with a traditional agent listing versus our offer, which you will find equitable. As members of the Tennessee community, we are committed to your satisfaction and aim to foster a positive relationship that extends far beyond the transaction.
The seasoned pros at Premise Home Solutions 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 Tennessee real estate market, a direct sale to the cash investors at Premise Home Solutions is the solution. The cash investors at Premise Home Solutions 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 Premise Home Solutions. For a no-hassle sale of your home during bankruptcy: a cash investor from Premise Home Solutions will buy your house directly, as-is, for cash. Call Premise Home Solutions at 423-331-6110.