Can I sell My Home While I Am In A Chapter 13?

23 Sep Can I sell My Home While I Am In A Chapter 13?

You are allowed to sell your home while you are in a Chapter 13. Be sure to contact your attorney and let him know what you want to do. You will be required to submit a signed Contract of Sale. Your attorney will then file a Motion to Sell with the court and put all creditors and the Trustee on notice.

Your Motion to Sell must specify the sale price, the value of the property (with some proof of value), and what your proposal is for the proceeds of the sale. Typically, you list the mortgage payoff amounts and all closing costs, including the realtor and legal fees. Usually a separate motion is necessary to allow payments to the realtor and closing attorney. You MUST get an order from the bankruptcy court approving the sale and its terms BEFORE you can close on the property.

When the Closing occurs, you will be required to give your attorney a copy of the Statement of Sale showing the sale price, deductions, and the proceeds. Your attorney will give the Statement to your Trustee. In addition, any proceeds from the sale that were ordered by the court to be paid to the trustee, must be made payable to the Trustee at the closing.

If the amount sent to the Trustee is sufficient to pay off your Chapter 13 Plan, your Trustee will file an Order with the court discharging your bankruptcy. The Judge will review and sign the Order. Shortly thereafter you will receive a Notice of Discharge from the Clerk of the Court, followed by a Final Decree. Once you have received these documents, your debts will be cleared and you will be out of bankruptcy.

If your Plan is complete, and your payments were being deducted from your paycheck, the Judge will file a Cease Payroll Deduction Order with your employer. It takes some time to complete this process. Any money deducted from your wages after your case is complet will be returned to you by the Court.

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Peter Orville is a bankruptcy lawyer in Binghamton, located in the Southern Tier of New York. He is a member and New York co-chair of the National Association of Consumer Bankruptcy Attorneys.
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