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Sell house after discharge but before closing?

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    Sell house after discharge but before closing?

    I'll be calling my attorney this week about this, but wanted to get some initial opinions on here as well. Here's the situation: I may have an opportunity to transfer with the company I work for that would involve relocating to California and selling my house here in Minnesota.

    A little background: Filed Ch.7 old laws in Sept 2005, discharged December 2005. Initially was a no asset that was converted to asset due to a preferential payment issue. Trustee agreed to settle the case for an agreed upon amount in November of 2006. For whatever reason the case is still not closed 1-1/2 years later (question #1 for the attorney is why not?). House value was listed on the BK schedules at $200,000 and actually with the current state of the market here would realistically go for a little less than that. House has a 1st mortgage not reaffirmed, and a 2nd mortgage (HELOC) that was reaffirmed. Both mortgages are with Wells Fargo. Equity in the house if it were to sell at market value is approximately $30,000, well within the exemptions for Minnesota.

    So the main question is: What are the ramifications if I need to sell the house before the case is closed? Will it change the way the trustee feels about anything?

    Thanks....
    Last edited by MysticNights; 07-22-2007, 03:58 PM.

    #2
    If you are discharged, then there are NO ramifications vis-a-vis the BK. You are officially "out of BK" once your case is discharged. However, even if you did not reaffirm the 1st mortgage, if you are going to sell the house, you need to get enough of a purchase price to repay both the 1st and 2nd mortgage in order to pass good title to the purchaser.

    This post, http://bkforum.com/showthread.php?t=10879, explains the difference between discharge and closing.

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