At United Home Offer, we understand that going through bankruptcy in Scottsdale can be a difficult and stressful time. One of the most common questions we receive is whether or not it’s possible to short-sell a house while in bankruptcy.
In this article, we will provide you with all the information you need to know about short-selling your house during bankruptcy and what you need to do to ensure a successful outcome.
What is a Short Sale?
A short sale is when you sell your property for less than what you owe on the mortgage. This option is usually pursued when you are unable to make your mortgage payments and owe more than what the property is worth.
In a short sale, the lender agrees to accept less than what is owed on the mortgage, and the remaining balance is forgiven. It is important to note that a short sale can have a negative impact on your credit score, but it is often less damaging than a foreclosure.
Can I Short Sell My House While in Bankruptcy?
Yes, it is possible to short-sell your house while in bankruptcy. However, there are certain steps that need to be taken to ensure a successful outcome.
Court Approval
First, you will need to obtain court approval before you can sell your house. This is because when you file for bankruptcy, an automatic stay goes into effect that prevents creditors from collecting on any debts that are owed. This includes the sale of assets such as your house. In order to sell your house, you will need to obtain permission from the bankruptcy court.
Mortgage Lender Approval
Next, you will need to get approval from your mortgage lender. The lender will need to agree to the short sale and forgive any remaining balance on the mortgage. This can be a complicated process, and it is important to work with an experienced attorney who can help you navigate this process.
Complete the Sale Before Your Bankruptcy Case Closes
Finally, you will need to make sure that the short sale is completed before your bankruptcy case is closed. If the sale is not completed before the case is closed, you could lose the protection of the automatic stay, and the lender could foreclose on the property.
Benefits of Short Selling During Bankruptcy in Scottsdale
Short-selling your house during bankruptcy can have several benefits.
Avoid Foreclosure
First, it can help you avoid foreclosure, which can be a lengthy and costly process. Foreclosure can also have a more significant negative impact on your credit score than a short sale.
Eliminate Mortgage Balance
Second, it can help you eliminate any remaining balance on your mortgage. In a short sale, the lender agrees to forgive any remaining balance on the mortgage, which can save you thousands of dollars.
Move On Quickly
Finally, it can help you move on from your financial difficulties and start fresh. By selling your house and eliminating your debt, you can begin to rebuild your credit and move towards a brighter financial future.
In conclusion, short-selling your house during bankruptcy is possible, but it requires careful planning and execution. You will need to obtain court approval, get approval from your mortgage lender, and complete the sale before your bankruptcy case is closed.
If you are considering short-selling your house during bankruptcy, it is important to work with an experienced attorney who can help you navigate the process and ensure a successful outcome.
At United Home Offer, we are committed to helping you achieve your financial goals and move towards a brighter future.
Say goodbye to the hassle of selling your home the traditional way! We buy houses in Scottsdale with our own cash and make fair offers, usually within 48 hours. No need to worry about marketing campaigns – we take care of all the details so you can start enjoying fast access to your money right away. Contact us today for more information on how we can help jump-start a successful sale process!
