When debt gets out of hand, it can be worrisome. If you’re one of many Georgia residents struggling to overcome a financial crisis, it’s worth your while to seek support and guidance from someone who is knowledgeable about state laws and debt relief options that may be available to you. When you have hit a roadblock built of unmanageable debt, it can be beneficial to file for bankruptcy.
You might also be considering selling your home and wondering whether it’s possible to do both — file for bankruptcy and sell a house during the process. You’ll be glad to know that it might be a viable option if you qualify for Chapter 13 bankruptcy. It’s wise to thoroughly review the requirements, as well as the implications that selling a home might have on this debt relief process.
Things to keep in mind regarding a home sale and bankruptcy
Both bankruptcy and real estate transactions are complex processes that require knowledge of the system to navigate proceedings without legal complications. Even then, sometimes issues arise that are difficult to resolve. If you’re considering selling your home during a Chapter 13 bankruptcy, keep these things in mind:
- You must file a motion to sell and have the bankruptcy court’s approval to sell your house.
- You must use the proceeds of the home sale to satisfy the terms of your Chapter 13 repayment agreement.
- If you get more for your house than expected, the surplus might be incorporated into your repayment plan, even if it exceeds the original amount you owed your lenders.
- Depending on how much equity you have in your home, you may or may not be able to keep a portion of proceeds from selling the house.
It’s best to pursue bankruptcy and a home sale under experienced guidance and support to ensure that you have adhered to both Georgia real estate and Chapter 13 bankruptcy laws.
A basic overview of the steps to take
To initiate a home sale during a Chapter 13 bankruptcy, you must complete all tasks shown in the following list:
- You must have the home appraised.
- You must also file a motion to sell in the bankruptcy court that is handling your proceedings.
- The court must grant approval for the home sale.
- You can then list your home on the market.
- You may now accept an offer on the house.
- You must report the proceeds to the trustee and bankruptcy court.
To avoid legal problems, it is always best to act alongside experienced guidance to protect your interests and make sure you have not overlooked or disregarded any real estate or bankruptcy laws.