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 Myrtle Beach, SC. 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 Myrtle Beach, SC. This motion should include important details such as the proposed selling price, a clear outline of how the proceeds will be used, and the names of any creditors holding liens on the property. It’s essential to present a well-organized plan that demonstrates how the sale will benefit both you and your creditors. Once the motion is filed, your creditors and any appointed trustee will have the opportunity to review and potentially object to the sale, especially if they believe it doesn’t align with their interests. The court will ultimately decide how the sale proceeds should be distributed, ensuring that the funds are used to satisfy the outstanding debts. It’s critical to work with an experienced bankruptcy attorney to navigate this process, as they can help ensure that your motion is thorough, that all necessary parties are properly notified, and that you are in compliance with bankruptcy laws throughout the sale.
Contingency
In a traditional sale, you’ll need to add a contingency clause to the contract when selling your house during bankruptcy in Myrtle Beach, SC, specifying that the sale is contingent upon obtaining bankruptcy court approval. This ensures that both the buyer and seller are protected in the event the court doesn’t approve the sale. However, under Chapter 7 bankruptcy, the trustee may determine it is in the best interest of creditors to sell the house if your home has high unprotected equity that exceeds your bankruptcy exemption. In this case, the trustee will use the proceeds from the sale to first pay off any secured debts, such as your mortgage. You will receive the exempted amount to which you are entitled under your state’s homestead exemption, but any remaining funds will be distributed to unsecured creditors, like credit card companies or medical debt, on a pro-rata basis. The trustee’s primary responsibility is to maximize the return for creditors, so it’s essential to understand that the process can be complex, and the final outcome will depend on the specifics of your exemption and the value of your property.
Proceeds
You may wonder what happens to any proceeds after the mortgage is satisfied when you sell your house during bankruptcy in Myrtle Beach, SC. While much of this depends on your homestead exemption, which can protect a portion of your equity, the remaining proceeds will typically be used to satisfy any outstanding unsecured creditors, such as credit card companies, medical bills, or personal loans. In some cases, the funds may also be allocated to cover the costs of your bankruptcy case, including legal fees and trustee expenses. If your homestead exemption doesn’t fully protect all the equity, the surplus might be used to pay down other debts as determined by the bankruptcy court. It’s important to understand that the exact disbursement of these funds will be subject to court approval, and the court will ensure that the proceeds are distributed fairly according to the rules of the bankruptcy process. Working with a bankruptcy attorney can help you better understand how your specific situation will affect the distribution of proceeds and ensure that you’re maximizing any protections available under your exemption.
Planned Payments
Under chapter 13, if you sell your house during bankruptcy in Myrtle Beach, SC, 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 Myrtle Beach, SC, you should request an itemized payoff statement.
Dynamic Home Buyers
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 Myrtle Beach, SC is to sell directly to the cash investors at Dynamic Home Buyers. Our policy at Dynamic Home Buyers 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 Dynamic Home Buyers will detail your expenditures and potential profits from a conventional listing with an agent, vs. our offer, which you’ll agree is fair. At Dynamic Home Buyers, we do this because we are your neighbors here in Myrtle Beach, SC, 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 Dynamic Home Buyers 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 Myrtle Beach, SC real estate market, a direct sale to the cash investors at Dynamic Home Buyers is the solution. The cash investors at Dynamic Home Buyers 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 Dynamic Home Buyers. For a no-hassle sale of your home during bankruptcy: a cash investor from Dynamic Home Buyers will buy your house directly, as-is, for cash. Call Dynamic Home Buyers at (843) 256-8393.