Bankruptcy is a choice that is made when people are looking for a fresh start. Whether you choose a total discharge through chapter 7 bankruptcy or would rather hang on tight to your assets through a chapter 13 bankruptcy, it can be great to get that relief.
With that in mind, most people who file for bankruptcy are also looking to move on from the situation that got them there. Maybe they want to start a new job, move out of their neighborhood, or downsize their home and other assets. But you might be asking – how long after chapter 13 bankruptcy can I sell my house?
Do you have to wait for weeks, months, or even years before selling your home? Can you get a home equity loan, a mortgage, or move into a new home after you finish up with your bankruptcy? Is it even a realistic possibility in the near future?
Let’s take a look at the confusion surrounding this issue – and get some much-needed clarity for those hoping to truly move on after this chapter in their lives!
A good first question in figuring out how and when to make your move might be whether you can sell your property during your bankruptcy.
The answer is technically no. Once you enter into a bankruptcy agreement of any kind, your property and assets – all of them – become part of the bankruptcy estate. This means that they are a documented part of the bankruptcy agreement and must remain where they are throughout.
This can be very confusing. After all, the whole reason so many people opt for chapter 13 bankruptcy is because they are much more likely to be allowed to keep assets and property. If you get to keep your home, you should be able to do what you want with it, right?
No. Regardless of whether you are working toward keeping a property or not, it is still part of your bankruptcy agreement. That means it is still wrapped up in the bankruptcy process and cannot legally be sold, gifted, or otherwise transferred.
Now, there may be situations in which selling your home during a bankruptcy makes sense. This may include the need to relocate for work, school, familial obligations, or other reasons. Regardless, it is important to address these needs with your bankruptcy attorney. They may be able to help you renegotiate the terms of your bankruptcy agreement to allow you to sell your home for these purposes. Without their guidance and assistance, though, you will definitely be stuck waiting until after your bankruptcy is discharged or your case is closed.
If you and your attorney decide that your situation makes it appropriate or necessary for you to sell your home, there is a lot to keep in mind to make that sale go smoothly.
First, you may have to get the court’s permission to work with a real estate broker. If so, you will likely be advised to disclose the fact that you are going through a bankruptcy upfront. This is good advice, even if you are not asked to do so by the court.
Likewise, you should advise any interested buyers that you are dealing with a bankruptcy. Bankruptcy can slow the process considerably, so letting anyone who might end up purchasing your home that this kind of delay is possible is courteous.
Just as you will have to get court permission to begin the sales process, you will also have to get court approval for the actual sale itself. You do have the right to make this kind of request during a chapter 13 bankruptcy, as opposed to a chapter 7 bankruptcy in which only your trustee would be allowed to sell your property.
However, keep in mind that the judge in charge of your case does not have to approve your request. If they determine that the sale is in opposition to the best interests of your case and the creditors involved, they may deny it. As with anything else involving bankruptcy, be sure to partner with a knowledgeable attorney to ensure the best possible result.
So, if you are stuck waiting util after your bankruptcy, you might be wondering what the timeline for that will be. “How long after chapter 13 bankruptcy can I sell my house?” you might be asking the attorney advising you.
Thankfully, there is no actual timeframe laid out by the law for when a person who has finished their chapter 13 bankruptcy can sell property. IF you have completely finished repaying your debts and your case has been closed, get out there and sell your house. You don’t have to wait even a day longer!
If, however, you are still working through your chapter 13 bankruptcy, you will have to keep timing in mind. There is a 21-day timeframe dictated in the regulations of chapter 13 regarding property sale. This means that for 21 full days after you file for your bankruptcy, you will not be permitted to sell or otherwise transfer property, regardless of your situation. That means that no matter how urgent your need is – or how convincing your layer is – you simply cannot legally sell your home.
Thankfully, that three-week timeframe is fairly brief. If you have legitimate reasons to sell your home, you can probably do so, even in the middle of your bankruptcy. The key is to work with a bankruptcy attorney who can guide you through the process and keep you from stepping out of line with the law.
Not sure how to get started or where you are on the bankruptcy timeline? Talk to the experienced team at the Van Horn Law Group. Our bankruptcy attorneys can help you navigate the entire bankruptcy process, including property sale if it applies to your scenario. Give us a call today to learn more!
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