If you’re at the point where you can’t afford to pay your bills, you can always file for bankruptcy. Filing for bankruptcy can help you clear off your debts and after the bankruptcy case, you can proceed to sell your house or any property you still own. However, you may face challenges selling your house after bankruptcy if you plan to buy a new home immediately after.
Bankruptcy and Real Estate
When you file for bankruptcy, the court places an automatic suspension on all your transactions and collection actions. If you file for Chapter 7 bankruptcy, the court may or may not exclude your home from legal action. If your home is not excluded, you may have to sell your home to help clear your debts and pay your bills. However, if your home is exempted from the proceedings, you can’t sell it and you can hold on to your property even long after bankruptcy.
You can decide to sell your home after bankruptcy. Most courts will permit you to go ahead with the sale of your house without fear of your trustee taking from the profit. You can proceed with selling your house regardless of the status of your mortgage. If you’re able to find a buyer who’s ready to buy your house at the price of your mortgage balance. You can use the profit you make from the sale to pay off your mortgage completely and even keep some extra cash for yourself.
But if you can’t find a buyer who’s ready to pay that much amount to buy your home, you can get permission from your lender to sell your house on a short sale. Selling your house on short sale allows you to sell your house for lower than your mortgage debt.
Buying a New Home
Selling your home after bankruptcy may be easy but buying a home after bankruptcy is hard. You can only be able to buy a new home if you have cash at hand. The hardest part about buying a home after bankruptcy is that you won’t be able to qualify for a conventional mortgage for at least the next seven years. However, you may be able to qualify for a mortgage insured by the Federal Housing Administration after two years of bankruptcy. Even at that, you still need to provide a record of good credit history since the end of the bankruptcy case.
You may not be able to buy a new home immediately after your bankruptcy, but you might be able to find a house you can rent after selling your house. However, before renting a house, you need to submit your credit record to the landlord, and already, your credit record has been affected by bankruptcy.
If you seek permission from the court, you could still sell your home while your bankruptcy case is ongoing. It’s just that most lenders are usually hesitant to work with sellers who have a bankruptcy case going on so it can even affect your buyers too.
Selling your house after bankruptcy is possible but the fact you have a bankruptcy issue can affect the sales. To sell your house and make a profit after bankruptcy, you should sell to a cash house buyer. A cash home buyer does not need to get a mortgage loan before they buy your house as they already have cash ready. If you’re looking for cash home buyers Conroe, you can come to us at Preferred House Buyers. We buy houses in any condition at the best price. We also ensure the sales process is seamless and hassle-free.
Contact us today to learn more about our services!