Sale of House while in Chapter 13

[stressedinPA]

Hello all,

I have a question that I hope someone can answer. I want to sell my house while I am currently in Chapter 13, 31st of 52 months. I was wondering what issues might come up with closing the sale. Does the Trustee have any say in whether we can sell the house? Selling price should be enough to payoff 1st and 2nd mortgage plus secured past due amount included in plan payments (both have a small balance left to be paid through the plan). Also 2005 property taxes in plan to be paid with proceeds from sale. I believe that all these amounts would be calculated for the closing by title company? Once house sale closes should we convert to a Chapter 7? Can I keep any proceeds left after mortgages and taxes are paid? My attorney said we can sell the house withhout any other approval. Any advice would be appreciated. Thank you.

[Flamingo]

Your first step is to contact your attorney about this. In order for you to sell your house or even refinance, you need Trustee permission while in a Chapter 13. Your attorney and Trustee will want to review all documents and financial information before they allow any sale and you can be sure if there are any proceeds, they will probably utilize those toward your Chapter 13 balance.

Call your attorney right away and get his/her opinion.

[chakra7]

I am currently going through the same thing. My house is up for sale. I had to get permission to use my real estate agent, but the process of putting the house up for sale did not have to wait until that approval; you just have to start the approval process which is basically submitting to your attorney the real estate agent's name and other pertinent information so he/she can file something with the trustee's office. The next thing the attorney/trustee have to approve is the sales contract - the initial one and the final one - at least that's what my attorney told me. I am looking at another house to rent-to-own pending the sale of my home. Any proceeds above 5,000 go toward the bankruptcy. You don't have to get permission to rent or rent-to-own while in the bankruptcy. Hope this helps.

[laurannm]

This may be a dumb question, but in this case does the attorney technically have to approve it, or just the trustee?

[Flamingo]

This may be a dumb question, but in this case does the attorney technically have to approve it, or just the trustee?

If you are represented by an attorney, submit the information to the attorney who will, in turn, submit it to the Trustee. For our refinancing after the Trustee reviewed all the paperwork and Truth in Lending, it was both the attorney and Trustee who submitted the Motion to the BK court to give us approval to refinance and buy out of our Plan or in this situation, sell the house.

[laurannm]

Gotcha....so the attorney files the motion, but in the end the trustee is the final approver

thanks

[Flamingo]

Gotcha....so the attorney files the motion, but in the end the trustee is the final approver

thanks

The Court approves....The attorney prepares the motion and the attorney and Trustee "both" together sign and file the Motion with the BK Court for approval. That is the way it was done for us in January 2006. Note we had to pay the attorney a fee of $400 for the Motion preparation.