How to Sell Your San Diego House During Bankruptcy 

Many homeowners are overwhelmed with their debt.  If you own a home in San Diego when you file for bankruptcy, it becomes part of the bankruptcy estate, the property or assets you own. In October of 2022, there was a twenty-seven percent increase in chapter 13 bankruptcy filings over the previous year. Bankruptcies, including all chapters, total a seven percent increase overall, which correlates strongly with the seven percent increase in inflation.  When you find yourself in a situation where your financial issues keep you from being able to pay creditors, bankruptcy is the only option.  

Those with secured and unsecured debts totaling less than $2,750,00 are eligible for chapter 13. However, chapter 7 is a liquidation process in which the trustee sells your assets to pay debts based on your total income, debt, and ability to repay. Homeowners like this want to sell their houses quickly to at least solve some of their financial challenges, however, many are not sure if this is possible during bankruptcy proceedings. 

Many factors influence the final determination towards the type of bankruptcy you file under, however, most homeowners will be able to sell their home during this process. This article will give you some step by step instructions on how to sell your San Diego home during bankruptcy.  

Proceeds

When you sell your house during bankruptcy in San Diego, you may wonder what happens to any proceeds after the mortgage is satisfied. Of course, much will depend on your homestead exemption. The proceeds will most likely go towards pay for the bankruptcy case in itself and any remaining unsecured creditors. 

Contingency

In a traditional sale, you’ll need to add a contingency clause to the contract to sell your house during bankruptcy in San Diego, stating that the sale is contingent upon obtaining bankruptcy court permission. However, under chapter 7, the trustee may determine to sell the house if your home has high unprotected equity under your bankruptcy exemption. With the funds, the trustee pays any secured debts like the mortgage, provides you with the exempted amount you are entitled to and then satisfies any unsecured creditors with a pro ratio share of any remaining funds.

Court Permission

You’ll need to file a motion with the court for leave to sell real property or approval to sell your house during bankruptcy in San Diego. You will want to include the selling price, your plans for the proceeds, and names of creditors holding liens on the property. This motion allows your creditors and any trustee to object, with the court determining the disbursement of any funds.

Trusted House Buyers

We understand that filing for bankruptcy is a stressful process.  Trusted House Buyers are here to help ease this process by paying for your house in full – IN CASH. The best way to sell your house during bankruptcy in San Diego is to sell directly to the cash investors at Trusted House Buyers. Our policy at Trusted House Buyers is full transparency through every step of the process because we want you to decide which sales method works best for your situation. We understand that every situation is unique and needs to be handled with care.  To that end, a cash investor from Trusted House Buyers will detail your expenditures and potential profits from a conventional listing with an agent, vs. our offer, which you’ll agree is fair. At Trusted House Buyers, we do this because we are your neighbors here in San Diego, we care about our community and the people in it, and we want you to feel good about working with us long after the deal is closed. 

At Trusted House Buyers, we will provide you with a guaranteed closing date, charging no commissions or closing costs, and absolutely no surprises.  A direct sale to the cash investors at Trusted House Buyers eases you of the burden to prep your house to list on the San Diego real estate market. The cash investors at Trusted House Buyers never charge commissions, and there are no hidden fees. When you make a direct sale to a cash investor at Trusted House Buyers, you can leave your house as-is and not worry about ANY showings. For a no-hassle sale of your home during bankruptcy: a cash investor from Trusted House Buyers will buy your house directly, as-is, for cash. Call Trusted House Buyers at 619-786-0973.

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