I want to talk about chapter 13 bankruptcy and whether you can sell your home or not during Chapter 13 bankruptcy? Often people wonder, “When I file bankruptcy, do I have to sell my home during the bankruptcy process or give it back to the bank?” The answer is no, you do not have to sell your home after filing Chapter 13 bankruptcy. However filing for bankruptcy will help you reorganize your debt.
If you do a Chapter 13 Bankruptcy, you could still sell your home for cash to an investor like LVN Real Estate. What’s going to happen is that you’re going to file a bankruptcy and you’re going to need to reorganize your debt. Part of that is your home and one of the key components to this is having equity in your house.
Let’s dive deeper into the meaning of having equity: If your house is worth $100,000 and you only owe $25,000 on it. You have $75,000 worth of equity in this case with those numbers. You would have what’s called the homestead exemption since your home is your primary house. You actually are exempt with $75,000 of your your equity during your Ch. 13. There are laws in place that protect a portion of your equity. So, you would retain $75,000 and the other twenty five thousand dollars would be used to pay your creditors when restructuring your debt. In this case the 25K would go to the lender if you were selling your home fast and needed to get cash out of your house.
You have to pay your creditors. You may have done a Chapter 13 Bankruptcy to stop the foreclosure process from happening. If so, this has given you time to sell your home. You can still sell your house for cash to an investor like LVN Real Estate while in Chapter 13 bankruptcy. The way that you would do this would be to go to your bankruptcy attorney and ask them if you can sell your house. They will work with the trustee to make sure that you can sell your house and you will be able to retain a portion of that cash. If you have enough equity, a buyer like LVN Real Estate would work directly with you or the attorney to make things easy and sell your home for cash in order to restructure your debt and fix your financial problems.
If you want to learn more about selling your home while in Chapter 13 Bankruptcy to a cash buyer, like LVN Real Estate. Please give us a call or submit a form on our website. We will reach out to you and talk about your Denver house selling options.