Q: Selling home in Chapter 13 or filing for a dismissal?
We fell behind on our mortgage payments. We have little debt but a lot (over $100,000) in home equity, so my spouse (NOT myself) filed Ch. 13 to protect our home about 5 months ago and have been making the mortgage payment and trustee’s payment. We just accepted a job offer out of state and now we need to sell our house. If we ask the trustee to allow the sale, won’t they take our proceeds and make the process of selling difficult for realtors/buyers/lenders? Or could we dismiss the case and try to sell before the mortgage company forecloses? We have a very limited amount of time in which to do this, as the new position out of state begins in one month. What are our options here? Without the house, there’s really no need to stay in BK, as the other debts (besides mortgage arrears) are small enough to pay on our own.
A:
It is very important that you contact your bankruptcy attorney. Most likely there is more than just the house involved.
Congratulations on the new job - I hope this is the start of a great new life.
A: Both are legitimate options. Discuss with your attorney. If you dismiss, you can sell your house, pay off the mortgage and other creditors and have a great new start. Similarly, if you get permission to sell the house from the court, the trustee will administer the sale and distribute the proceeds to the creditors. Discuss with your bankruptcy lawyer which option best fits your needs.
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