Navigating Bankruptcy in Tennessee: What You Need to Know About Keeping Your House
Are you considering filing for bankruptcy in Tennessee? You're not alone. Bankruptcy can be a helpful tool for individuals and businesses struggling with debt.
But what happens to your property, specifically your house, during bankruptcy? Can you keep it? In this article, we'll explore the ins and outs of bankruptcy in Tennessee and what you need to know about keeping your house. You’ll also learn how to sell your house to avoid bankruptcy in Tennessee.
How Does Bankruptcy Work in Tennessee
Bankruptcy is a legal process that helps individuals and businesses eliminate or repay their debts under the protection of the bankruptcy court. In Tennessee, there are two types of bankruptcy that individuals can file for: Chapter 7 and Chapter 13.
- Chapter 7 bankruptcy, also known as "liquidation bankruptcy," involves selling non-exempt assets to repay creditors.
- Chapter 13 bankruptcy, on the other hand, involves creating a repayment plan to pay back creditors over a set period of time.
Bankruptcy is not a one-size-fits-all solution. Depending on your individual circumstances, one type of bankruptcy may be better suited for your needs than the other.
How Does Bankruptcy Affect Property Ownership?
One of the most common concerns individuals have when filing for bankruptcy is whether they will lose their property, specifically their house. The answer is not always straightforward.
The outcome depends on several factors, including
- Type of bankruptcy you file
- The value of your home
- The amount of equity you have in your home.
Chapter 7 Bankruptcy
In Chapter 7 bankruptcy, your home is considered an asset and may be sold to repay creditors if it has equity. However, Tennessee has a homestead exemption that allows individuals to protect up to $5,000 of equity in their primary residence. If you have more equity than the homestead exemption allows, your home may be sold to pay off creditors.
Chapter 13 Bankruptcy
In Chapter 13 bankruptcy, you can keep your house as long as you continue to make your mortgage payments. Your mortgage payments will be included in your repayment plan, and you'll have to continue making them on time to keep your home.
Can I Keep My House During Bankruptcy?
The short answer is yes, in most cases, you can keep your house during bankruptcy. However, as we mentioned earlier, it depends on several factors. If you're filing for Chapter 7 bankruptcy and your home has equity above the homestead exemption, it's possible your home may be sold to pay off creditors.
If you're filing for Chapter 13 bankruptcy, you can keep your house as long as you continue to make your mortgage payments. However, if you fall behind on your mortgage payments, your lender may initiate foreclosure proceedings. It's important to stay current on your mortgage payments during bankruptcy to avoid losing your home.
Selling Your House to Avoid Bankruptcy
If you're struggling with debt and facing the possibility of bankruptcy, selling your distressed house may be a way to avoid it altogether. Selling your house can provide you with the cash you need to pay off your debts and start fresh.
Selling your house for cash has several benefits, including a quick and efficient sale process, no need for repairs or renovations, and no commission fees. A cash home sale can also provide you with the funds you need to pay off your debts and avoid bankruptcy.
The Legal Process of Selling Your House During Bankruptcy
If you're selling your house during bankruptcy, there are a few legal steps you'll need to take.
- First, you'll need to get approval from the bankruptcy court. This involves filing a motion with the court and obtaining permission to sell your house.
- Next, you'll need to work with your home buying company to ensure the sale process complies with bankruptcy laws. Your home buying company will work with you to provide all necessary documentation and ensure a smooth and legal sale process.
While bankruptcy can be a helpful tool for individuals struggling with debt, there are several common mistakes to avoid. These include
- Failing to disclose all assets
- Making large purchases before filing for bankruptcy
- Transferring assets to friends or family members.
When it comes to property ownership, it's important to stay current on your mortgage payments and understand your options for keeping your home during bankruptcy. It's also important to work with a reputable home buying company if you decide to sell your house to avoid bankruptcy.
Navigating bankruptcy in Tennessee can be overwhelming, especially when it comes to property ownership. While it's possible to keep your house during bankruptcy, it depends on several factors, including the type of bankruptcy you file for and the value of your home.
If you're considering selling your house to avoid bankruptcy, a cash home sale can provide you with the funds you need to pay off your debts and start fresh. Just be sure to work with a reputable home buying company and understand the legal process involved in selling your house during bankruptcy.
Get Cash for My Home in Knoxville, Tennessee
If you need to sell your house fast but don’t want the hassle of a traditional home sale, contact New Porch Home Buyers. We buy houses as-is. No repairs are needed. Avoid closing costs and realtor commissions. Close in as little as seven days. Call 865-234-9995 to get cash for your home from our local home buyers in Tennessee.