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How to Sell Your House During Bankruptcy in Cranston

How to Sell Your House During Bankruptcy in Cranston

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 Cranston. 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 Cranston. 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

When selling your house during bankruptcy in Cranston, you’ll need to receive permission from the court for any sale. This is typically done through a “contingency clause,” which states that the sale will only be completed if all parties agree to its terms.

Chapter 7 bankruptcy may change this process slightly, as the trustee overseeing your case can decide to sell your home if there is high unprotected equity present under the exemption limits provided by law. Any funds from the sale will be used to pay off secured debts (like a mortgage), provide you with an exempted amount that you are entitled to receive, and satisfy any unsecured creditors with a pro-rata share of any remaining money.

Proceeds

You may wonder what happens to any proceeds after the mortgage is satisfied when you sell your house during bankruptcy in Cranston. 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 Cranston, 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 Cranston, you should request an itemized payoff statement. 

Lyon 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 Cranston is to sell directly to the cash investors at Lyon Home Buyers. Our policy at Lyon 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 Lyon 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 Lyon Home Buyers, we do this because we are your neighbors here in Cranston, 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 Lyon 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 Cranston real estate market, a direct sale to the cash investors at Lyon Home Buyers is the solution. The cash investors at Lyon 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 Lyon Home Buyers. For a no-hassle sale of your home during bankruptcy: a cash investor from Lyon Home Buyers will buy your house directly, as-is, for cash. Call Lyon Home Buyers at 401-829-1533.

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