Planning to sell your home in bankruptcy in South Carolina?
We got you! First, you have to be familiar with bankruptcy law in South Carolina. As such, you have to inform your attorney early if you plan on selling your home.
If you have filed for Chapter 13 bankruptcy (vs. Chapter 7), wherein you give up a lot of financial control to your bankruptcy trustee, here are some steps you have to go through to sell your home.
Take note that even though you keep possession of your property, like a home, it becomes part of your Chapter 13 bankruptcy estate. The trustee manages this estate and makes major financial decisions that affect your property.
Inform all stakeholders
There is a great deal of paperwork involved in selling a home while you’re in Chapter 13. So whether you are in the middle of your Chapter 13 case or years into your repayment plan, notify your attorney once you know that you intend to sell your home since they need time to inform your bankruptcy trustee and put the documentation together.
In addition, it is important to inform your real estate agent and prospective buyer that you are in Chapter 13.
Start Early
When selling your home in bankruptcy, time is of the essence. Give your attorney anywhere from 30 to 45 days to negotiate the sale with your trustee and to put the paperwork in motion. Do note that your creditors have a right to object to the sale, just as they have a right to object to your repayment plan.
Motion to Sell
The motion to sell is the crucial piece of paperwork you need if you’re trying to sell your home while in Chapter 13. It should include the sale price of the home, the home’s value, and the home appraisal to validate the home’s value, and a proposal for distributing what you get from the sale. Usually, the proceeds are applied to paying off the mortgage and closing costs. Once the trustee approves the document, the sale can proceed.
Statement of Sale
Once the property has been closed, you will need to provide your attorney with a copy of what is called the statement of sale. It is also important to get this to your trustee as soon as possible. The statement provides the home’s final sale price, any closing-related deductions and how much is left over from the sale. In addition, this is when you are required to make any payments the trustee ordered during the motion to sell phase.
Discharging the Debt
If the home’s sale can pay off your repayment plan, then you can expect a discharge of your Chapter 13 shortly after the sale. The trustee will order the discharge, which will be signed by a bankruptcy judge and sent to you in the form of a final decree. Make sure to keep this document as this will be proof that you are out of debt.
In addition to these steps, you might also want to consider a cash home buyer in selling your home.
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