Bankruptcy: Selling Your Home While in a BK and Priority Debt

June 18, 2010 - PRLog -- Many people do not realize that they can sell their home while they are still in a Chapter 13 bankruptcy.

You will want to start by finding someone to put the house on the market. Once you have an interested buyer, then the realtor will draw up a contract between the buyer and the seller. Once this is done, you will need to contact your attorney’s office, so they can forward this information on to the trustee. The trustee will give you approval to sell your home and in the same letter it will also state anything that may need to be done, for example; the proceeds you receive may be used to payoff the bankruptcy.

If you are trying to sell real property that is not your homestead, then it must be dealt with a little differently. We will still have to have the contract between the buyer and the seller, but now we have to file a motion to sell non-exempt property. There are attorney fees associated with this, so make sure that you consult your attorney for those fees. The hearing will take about 30-45 days to be heard before the Judge. If there are no objections then the attorney is able to upload the order and put any explanations that the trustee may want in there. Again the example of putting “x” amount of dollars towards your bankruptcy.

If you are in a Chapter 7 you do not have to get permission, however, you need to wait 30 days after your meeting of creditors meeting. The reason for this is that that is the deadline the creditors have to object to your exemptions. If there are no objections filed by then, you don’t have to do anything but proceed to selling.

All divisions may be different, so make sure that you consult your attorney before making any decision to move forward.

A priority debt is best defined as a debt that receives priority payment status over other debts listed in the bankruptcy. This type of debt includes past due IRS debt assessed less than 3 years prior to the petition filing date, Child Support arrears, bankruptcy attorney fees, etc. Some IRS debt is classified as unsecured due to the assessment date being more than 3 years prior to the petition filing date. Unsecured IRS debt can be discharged in a bankruptcy and the IRS can no longer attempt to collect this debt. They can however, offset future refunds against the debt that has been discharged.

For more information visit http://www.bankrupcy-alternative.com/effect-of-bankruptcy... or call us directly. Here is another bankruptcy article http://www.prlog.org/10745987-pre-bankruptcy-filing-and-b... for your reading enjoyment.

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