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    my3labs's Avatar
    my3labs Posts: 2, Reputation: 1
    New Member

    Apr 11, 2007, 04:45 PM
    Selling house in bankruptcy
    My husband filed ch. 13 in 2005 in Tennessee. He did not include our 1st and 2nd mortgages in his bankruptcy (we pay them outside of the plan). I did not file bankruptcy. We are both in title on the house and we are both on the 1st and 2nd mortgages. We now want to sell our house and I have been preapproved to purchase a new house in my name only. I need the proceeds from the sale of our current home to pay off some debt and to have money for the down payment of the new home. Should we Quit Claim the property to my name (so that the house is only in my name)? Can we sell our house or do we need to go through the court?

    In response to my previous question and Fr_Chuck's answer: What am I entitled to as a spouse that did not file ch. 13? Do I have to wait until the bankruptcy is complete to sell my house or can we sell it and I get the proceeds? When we sell the house I need to payoff some of my debt in order to qualify for the new loan. Will I be able to put this debt on the settlement statement and it be considered as closing costs? Or does the court look at how much I owe in mortgage payments vs. how much I am selling the house for and take what we make? Do they allow me to include things like loans I need to payoff, real estate agent commission that have to be paid and attorney fees that have to be paid?

    3rd question that goes with the 1st and 2nd question that FR_Chuck answered: On the settlement statement when we sell our house we will have our sales price minus attorney fees, 1st and 2nd mortgage payoffs, real estate commission, seller paid closing costs for the buyer and I will have to also list 2 debts that have to be paid off with the sale of my current home in order to purchase the new home. Will the court look at the 2 loans that I have to pay off as a portion of my half of the proceeds or do they just look at the bottom line that says cash to seller at close $?? And take half of that amount? For example: Say my home sells for $145,000. I will owe $8700 in real estate commissions, $92,000 1st mortgage payoff, $22,100 2nd mortgage payoff, $3000 in seller paid closing costs for the buyer, $1500 for my attorney fees, and I will need to pay off 2 loans that total $6600.00. Does the court see the total proceeds as $11,100.00 or do the see it as $17,700.00 (not including the $6600 in loans I have to pay off). In other words, if I get 1/2 of the proceeds from the sale, will I get $5550.00 or $8850.00? Is there a way to get permission from the court prior to selling my house to prevent the court from making the decision and it affecting my ability to purchase the new home?
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,302, Reputation: 7692

    Apr 11, 2007, 04:56 PM
    If he quit claims the deed, or if you sell the house, he has to report this, since this sell brings him income. And trying to just quit claim it would be trying to fraud the court of his share of the income.

    The court has to be make away of this sell and give its permission.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,302, Reputation: 7692

    Apr 11, 2007, 06:09 PM
    I merged your posts, you need not to ask a new question each time, people can not just review all your old posts, So please on future questions on the same post, just add to it, not start a new one.

    In doing this I have lost my previous answers to you somehow.
    my3labs's Avatar
    my3labs Posts: 2, Reputation: 1
    New Member

    Apr 11, 2007, 06:11 PM
    Can you help answer the 3rd question? I couldn't figure out how to add to my original questions. Thanks!
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,302, Reputation: 7692

    Apr 11, 2007, 06:15 PM
    You are trying to get a dollar bottom line, that issue is no one knows until you talk to the bankrutpcy trustee, they may say no issue, don't even have to report it, or they will want to review the sell procedeces and even then there is an amount of exemption allowed for property ownership, and that could be applied, you need the attorney that did the bankrutpcy review this and advise you on it.

    No one can give you an exact answer, since perhaps you can prove that your money was what was used to pay for the primiary bills, so you would have more claim to the house than your husband and a lot of other evidence your attorney can show the court. ( fi they want to see it)

    But that is just the issue, if the proceeds are as small as you are talking about after the sale of the house, it is possible it falls under the exemptions, but you really need to talk to your bankruptcy attorney, and if he believes it is needed the trustee of the bankruptcy.

    I have not done any bankruptcys since the new laws have been passed, and I know they tightend up the laws.

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