Can I Sell My House During Bankruptcy in Texas?

It is generally legal to sell your house during bankruptcy in Texas. However, the process can be more complicated than a traditional home sale. The sale of your property is subject to the oversight of the bankruptcy court and must be approved by the court and the trustee overseeing your bankruptcy case.

During the bankruptcy process, the bankruptcy trustee will be appointed to oversee your assets and will have the authority to approve or disapprove any sale of assets, including your home. The trustee will ensure that the sale proceeds will be used to pay off your creditors in accordance with the bankruptcy code.

Do I Have to Use the Proceeds from My Sale to Pay Debts?

The court may order you to use the proceeds from the sale of your home to pay off specific creditors rather than allowing you to keep the money. Additionally, different rules may apply to the sale of your home depending on the type of bankruptcy you filed. What can you expect with a Chapter 7 vs. Chapter 13 Bankruptcy?

Chapter 7 Bankruptcy

In a Chapter 7 bankruptcy, the trustee may sell your home to pay off your creditors, including the mortgage company, to avoid foreclosure.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy allows you to keep your home and pay off your creditors through a repayment plan.

What Is the Bankruptcy Process in Texas?

The bankruptcy process in Texas is similar to the process in other states, but there may be some specific rules and requirements that are unique to Texas. Here is a general overview of the bankruptcy process in Texas:

1. Pre-filing requirements: Individuals must complete credit counseling with an approved agency before filing for bankruptcy in Texas.
2. Filing the bankruptcy petition: The individual will file with the appropriate bankruptcy court in Texas. This petition includes information about the individual's financial situation, including a list of assets and liabilities, income and expenses, and a list of creditors.
3. Automatic stay: Once the bankruptcy petition is filed, an automatic stay goes into effect, which means that creditors are prohibited from taking further collection actions against the individual.
4. Meeting of creditors: The individual is required to attend a meeting of creditors, also known as a 341 meeting, where the individual will be questioned by the bankruptcy trustee and any creditors who choose to attend.
5. Discharge: If the court approves the bankruptcy case, the individual will receive a discharge of most of their debts.
6. Reaffirmation Agreement: If the individual wants to keep a secured asset like a car or house, they may be required to sign a reaffirmation agreement, which means they will continue to be liable for the debt even after the bankruptcy.
7. Completion of the plan: If the individual filed for a Chapter 13 bankruptcy, they will be required to complete a repayment plan and make payments to their creditors for three to five years.

What Is the Best Way to Sell My House During Bankruptcy?

A cash home sale can be an attractive option for selling your house during bankruptcy, as it can allow you to close the sale quickly and avoid some of the complications that can arise with traditional home sales. Some benefits of a cash home sale during bankruptcy include:

1. Faster closing times: Cash sales can often close much faster than traditional sales that involve financing, which can take weeks or even months to finalize. Selling your house quickly to pay off debts or avoiding foreclosure can be beneficial.
2. Fewer contingencies: A cash sale doesn't require a home inspection or appraisal, so fewer contingencies need to be met before the sale can be completed.
3. Simplicity: A cash sale is a straightforward process, with no need to deal with the complexities of mortgage financing.
4. Avoiding Foreclosures: In some cases, homeowners facing foreclosure may be able to sell their property quickly to a cash buyer and avoid the foreclosure process.

A cash home sale may appeal more to the trustee as the cash sale can close quickly, and the proceeds can be used to pay off the creditors.

CEANA Group Can Help You Avoid Bankruptcy With a Cash Home Sale

If you need help selling your house during bankruptcy, contact CEANA Group. We can help you avoid bankruptcy with a cash home sale. We can assess your property, make an offer, and close in as little as a week. Before you file bankruptcy, call 832-779-0803 to get a fast cash offer on your house.