If you find yourself in the unfortunate circumstance of having to file for bankruptcy and you own a home, the property becomes part of the bankruptcy estate. In October of 2022, there was a twenty-seven percent increase in chapter 13 bankruptcy filings over the previous year. Bankruptcies, including all chapters, total a seven percent increase overall, which correlates strongly with the seven percent increase in inflation. If you’re a homeowner feeling overwhelmed by your debt, you’re not alone. Many homeowners find it difficult to pay creditors, leaving them no choice other than to file bankruptcy, which can stop a foreclosure on their primary residence.
Those with secured and unsecured debts summing less than $2,750,00 are eligible for chapter 13. However, chapter 7 is a liquidation process in which the trustee sells your assets to pay debts based on your total income, debt, and ability to repay. Often, these homeowners want to sell their houses to solve at least some of their financial troubles but wonder if it is possible during bankruptcy proceedings.
While the rules for the process may vary for the type of bankruptcy you file under, and many factors affect the final decision, for most homeowners, the short answer is yes. So read on as we explore how to sell your house during bankruptcy in Alaska. Please note that this article is for informational purposes, not financial or legal advice.
Court Permission
You’ll need to file an action with the court for leave to sell real property or approval to sell your house during bankruptcy in Alaska. You will want to comprise the selling price, your plans for the proceeds, and the names of creditors holding liens on the property. This motion permits your creditors and any trustee to object, with the court deciding the disbursement of any funds.
Contingency
In a traditional sale, you’ll need to add a contingency clause to the contract to sell your house during bankruptcy in Alaska, expressing that the sale is contingent upon obtaining bankruptcy court approval. However, under chapter 7, the trustee may select to sell the house if your home has unprotected equity under your bankruptcy exemption. With the funds, the trustee pays any secured debts like the mortgage, provides you with the exempted amount you are entitled to, and then satisfies any unsecured creditors with a pro ratio share of any remaining funds.
Proceeds
You may wonder what happens to any proceeds after the mortgage is satisfied when you sell your house during bankruptcy in Alaska. Of course, much will depend on your homestead exemption. Nevertheless, the proceeds will likely go towards paying any remaining unsecured creditors or paying for the bankruptcy case.
Planned Payments
Under chapter 13, if you sell your house during bankruptcy in Alaska, you will need to modify your planned payments. Depending on the realized sale value, you may pay your plan off earlier as the proceeds go directly towards the bankruptcy.
Itemized Payoff Statement
To guarantee no fees stay to surprise you after you sell your house during bankruptcy in Alaska, you should request an itemized payoff statement.
Anchorage Home Buyers
Don’t waste any time! With competition still driven by low supply and rising interest rates on the horizon, now is the time to cash in on your house. This is the best way to sell your home during bankruptcy in Alaska is to sell directly to Anchorage Home Buyers. Our policy is full transparency through every step of the process because we want you to decide which sales method works best for your situation. Anchorage Home Buyers will document your expenditures and potential profits from a conventional listing with an agent, vs. our offer. At Anchorage Home Buyers, we do this because we care about our community and the people in it, and we want you to feel good about working with us long after the deal is closed.
At Anchorage Home Buyers, we have experience with sellers going through bankruptcy and we have the solution you desire. We’ll provide you with a guaranteed closing date, and we never charge commission fees or closing costs. If you’d like to avoid the work and out-of-pocket costs of prepping your house to list on the Alaskan real estate market, consider selling directly to Anchorage Home Buyers. When you work with us, you won’t even need to worry about showings. We purchase homes in all kinds of ways and would love to speak with you about what option would suit your needs best. For a hassle-free sale of your home during bankruptcy: consider selling to Anchorage Home Buyers. Call Anchorage Home Buyers at 907-331-4472.