You can sell inside a Chapter 13. It takes a motion, not a miracle.
The plan payments and the property both stay under the court's supervision, so a sale needs authorization. That is a process with a form and a hearing, not a wall.
See if this worksWhy people sell in the middle of a plan
Chapter 13 plans run for years, and life does not hold still that long. The income that made the plan feasible changes. The house needs a roof the plan has no room for. Or the arrears being cured turn out to be larger than the equity being protected.
Selling can convert a monthly obligation you are struggling with into a lump sum that pays down or completes the plan. Whether that is a good outcome depends entirely on your numbers, which your bankruptcy attorney is best placed to run.
The motion to sell
Selling real property in an active Chapter 13 generally requires filing a motion with the bankruptcy court, giving notice to creditors and the trustee, and obtaining an order authorizing the sale. Terms including the price and how proceeds are distributed are typically set out in the order.
Timelines vary by district and by how busy the court is. Notice periods alone can run several weeks. Build that into any expectation about closing rather than treating it as an afterthought.
Being under contract through the waiting period
This is where financed buyers fall apart. A retail buyer with a locked rate and a lease ending cannot sit through a motion and a notice period without pressure to renegotiate or walk.
We can. Our offer does not expire because a court calendar moved, and we are not paying interest on a loan while we wait. That patience is most of what we bring to a bankruptcy sale.
Five questions. That is the whole thing.
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Question 1 of 5
What people ask about this
Will selling get my case dismissed?
Not by itself. Depending on the numbers it might let you complete the plan early, convert the case, or modify it. That is a conversation for your attorney and the trustee.
Who gets the proceeds?
The sale order sets it out. Typically secured liens are paid first, then whatever the plan and the code require. What reaches you depends on the specifics of your case.
How long does the motion take?
It depends on the district and the docket. Ask your attorney for a realistic range in your court before you commit to any closing date.
Often it is more than one thing at once
See if this works.
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