Many individuals believe that their lives can never return to normal once they file for bankruptcy. The reality, however, does not have to be this way. Contact your experienced bankruptcy attorney Michael Alan Siddons and learn how to safely and efficiently manage your real estate after bankruptcy. Before that consultation, here is everything you need to know about selling a house after filing for bankruptcy.

What Is Bankruptcy?

Bankruptcy is a legal process through which human or non-human entities (such as firms or government agencies) can repay or eliminate some or all of their debts under the protection of the federal bankruptcy code. You can seek shelter under Chapter 7 or Chapter 13 (the bankruptcy code’s commonest types of bankruptcy filed in the U.S.). Under Chapter 7 bankruptcy, the bankruptcy trustee can liquidate some of your property to repay your debt, and you do not have to file a repayment plan. 

However, many exemptions under the law allow you to keep the protected property. Under Chapter 13 bankruptcy, you get to keep all your property; however, you must make monthly payments over 3-5 years to pay back some or all your debt.  

How Soon Can You Sell Your House After Filing Chapter 7 Media, PA?

You can sell your house as soon as the court issues a bankruptcy discharge, after which you are considered the legal owner of your real estate. Usually, a Chapter 7 bankruptcy discharges after 3-6 months; however, the court may make provisos that can delay the immediate selling of your home, such as clearing existing liens.

What Is A Bankruptcy Discharge and How Does It Work?

One of the main reasons individuals file bankruptcy is to get a “discharge,” a court order stating that you do not have to pay some or all of your debts. Some debts cannot be discharged. These include:

• Alimony;
• Most taxes;
• Medical bills;
• Child support;
• Most student loans; and
• Personal injury caused by drunk driving or driving under the influence.

The discharge strictly applies to debts you incurred before filing for bankruptcy. If the judge discovers that you bought property or received money by fraud, your debt may not be discharged.

You need to list all your debts and property in your bankruptcy schedule because failure to do so may result in un-discharged debts. A judge can also refuse to discharge your debts if you are dishonest during your bankruptcy case, such as falsifying records, hiding property, or defying a court order. 

You can receive a Chapter 7 discharge once every eight years. Other rules may apply if you have previously received a Chapter 13 discharge. No lender can make you pay a discharged debt; however, you can choose to pay any debt you want to pay.

Can You Sell A House That Is In Bankruptcy?

Once you file bankruptcy, your home and other possessions become part of the bankruptcy case. Even though your creditors cannot foreclose your property because it is protected under bankruptcy law, you cannot sell your house without permission from the bankruptcy court. However, the bankruptcy trustee can ask the court for permission to sell your home to pay back your debts.

What Is The Best Time To Sell A House?

The best time to sell your house is after bankruptcy because the trustee cannot proceed. If you live in a state that allows you to exempt your homestead, you can get enough money from selling your house to buy a new home with no outside financing. However, this is not the case for most debtors. The amount you receive may not be enough to put a down payment on a home, and it may be worse if bankruptcy damages your credit.

Can You Remove a Second Mortgage From A Home in Bankruptcy?

Lien stripping can allow you to remove the second mortgage from your home. It is a process that eliminates junior loans and changes your debt from a secured to an unsecured loan. Unsecured debt has no collateral like most medical bills and credit cards.

Can Creditors Collect After Chapter 7 Is Filed?

After Chapter 7 is filed, creditors have to stop all collection efforts. When you file a Chapter 7 bankruptcy, an automatic stay takes effect. The automatic stay states that creditors cannot contact you to make payments after filing for Chapter 7 bankruptcy. It protects you from annoying or harassing letters, emails, or phone calls.

Who Can File a Chapter 7?

Individuals or businesses with domicile, residence, or property in the U.S. can file a Chapter 7. To qualify for Chapter 7, the debtor’s earnings should not be enough to fund a repayment plan. The debtor must not have received a Chapter 7 discharge within the past eight years or a bankruptcy filing dismissed within the past 180 days.

Does Filing for Chapter 7 Affect Your Credit Score?

Filing for Chapter 7 negatively impacts your credit score. If you have a good credit score, you will lose more points if you liquidate your assets. And, because paying your debt is the only way to improve your score, getting rid of the debt will harm your score, and future lenders will view you as a credit risk because you could not pay your debt. A Chapter 7 will also remain on your credit history for about ten years. 

Why Should You Hire A Bankruptcy Attorney?

There are several reasons why you should hire a bankruptcy attorney. These include:

Short Sales

Our attorneys have established strong relationships with different mortgage lenders and estate brokers. They can handle all aspects of your transaction, from negotiating with your lender to working with a broker to finalize the sale. In a short sale, a financially distressed homeowner sells their house to a third party, and the mortgage lender consents to settle for less than what is owed.

Repossession

 Repossession describes a situation whereby a financial institution takes back an object (vehicle or house) leased or rented in a transaction or used as collateral. If you have fallen behind on your car or mortgage payments and face the risk of repossession, Michael Alan Siddons can help. You do not have to lose your personal property or home. We have years of experience dealing with repossession and can help you get back objects that have been repossessed.

Foreclosure

Foreclosure is a process through which a home becomes the property of a lending institution. The foreclosure process begins when a homeowner fails to make mortgage payments at the appointment time because of medical challenges, unemployment, loan terms, or property management disputes. The lender usually sends a letter demanding payment known as a Notice of Default, which relays the lender’s intention to evict you from the premises, terminate your rights in that property, and sell your property to settle outstanding debt.

 If you face the risk of foreclosure, get in touch with us as soon as possible. Our attorneys are experienced in litigating mortgage foreclosure complaints and using bankruptcy laws to stop foreclosure proceedings.

Loan Modifications

 Many mortgage lenders have to face the reality that they have little to no chance of receiving full payment of the mortgages they have issued. As such, they would rather negotiate their mortgages at terms that are more favorable to borrowers. A loan modification can do the following for you:

• Lower your interest rate;
• Extend the term of your loan;
• Lower the outstanding mortgage; and
• Incorporate the mortgage arrears into the mortgage.

The extra money you get from better loan terms can help you get a fresh start. Our law firm is experienced in all aspects of loan modifications. We can work with you from the negotiation stage to the final documentation and ensure that you get the best loan terms.

Defense of Credit Card Lawsuits

Credit card lawsuits are among the most common lawsuits in Media, PA. Before you file a bankruptcy petition, you must determine whether or on you have a valid defense under the law. The lawyer at Michael Alan Siddons has years of experience litigating credit card lawsuits. We know all the defenses available in Media, PA, and can help you defend your credit card claim.

Consult a Bankruptcy Attorney in Media, PA

If you find it difficult to meet your financial obligations, Michael Alan Siddons can help. We are committed to helping you achieve the debt relief you need to get your life back on track and do everything we can to help you avoid greater financial harm and achieve the best possible result.

We help you keep your legal expenses low by discussing all fees and costs upfront, using a flat-fee billing arrangement, offering a $0 down Chapter 7 bankruptcy filing service, and offering free consultations.

Call us at 610-255-7500, email us at msiddons@siddonslaw.com, or visit our physical location at MEDIA, PA 230 North Monroe Street Suite A Media, PA 19063 to schedule a consultation with your local bankruptcy attorney. We are here to help you find debt relief in times of financial instability.