No one ever wants to find themselves in money trouble. Be it credit card debt or the loss of a job, financial issues are a leading stressor in our country. Sometimes financial problems have to end in bankruptcy as an end to bleeding funds. One of these forms of bankruptcy is Chapter 13. If you are a homeowner and find yourself in this predicament, you may need to know if you can sell your house while in chapter 13 bankruptcy.
What is Chapter 13?
As one of the many forms of bankruptcy, this kind is one of the most common for individuals. As opposed to the also common Chapter 7, this form allows those in debt to agree to a payment plan to repay debt.
So while you may not be relieved of all of your debt, a judge and bankruptcy trustee will help you form a payment plan to repay your debt over time. This allows you to to salvage what is left of your credit worthiness.
Can I Sell My House in Bankruptcy?
Even if you default on your mortgage payments, you can probably still keep your house in a Chapter 13 settlement. That being said, you may decide it would help your finances most to sell your house.
Believe it or not, you can sell your house while in bankruptcy. The only catch is that you need approval from your bankruptcy trustee to sell your home in bankruptcy. This person represents your creditors and communicates the status of your repayment plan.
If you decide this is right for you, reach out to your trustee to make sure this is the right call. They may say you shouldn’t sell your house and you will need to consider all options. In the end, your creditors still need to be paid back. So regardless if your house is a mobile home or has a 3 car garage, it is possible to sell it in bankruptcy.