February 2, 2023

Can I Sell My House During Bankruptcy in Texas?

By: Clint Crawford

Yes, you can sell your house during bankruptcy in Texas. However, the proceeds from the sale may be subject to certain restrictions and limitations imposed by the bankruptcy court, depending on the type of bankruptcy you filed and the specific circumstances of your case. 

Both your creditors and the court will want to know that you intend to allocate the proceeds from the house to your debt. If so, you may be able to stop the bankruptcy process or avoid filing. So, if you need to sell your house fast in DFW, Texas, a cash home sale may be your option. It gives you the flexibility you need to unload your property without incurring selling expenses or making home repairs.

Can I Use My House to Pay Off Debt During Bankruptcy?

It depends on the type of bankruptcy you file and the laws of your state. In Chapter 7 bankruptcy, your house may be sold to pay off creditors. In Chapter 13 bankruptcy, you may be able to keep your house and repay your debts over a 3-5 year period, but you must have sufficient income to make payments. 

In both cases, the decision on whether to use your house to pay off debt is made by the bankruptcy court and the specific details can vary depending on the jurisdiction. It's important to consult a bankruptcy attorney to understand the specific rules and options available to you.

What are the Benefits of a Cash Home Sale During Bankruptcy

There are several ways in which a cash home sale can help you avoid or put an end to bankruptcy.

  1. Faster sale: You can complete a cash sale faster than a traditional home sale because there is no need to wait for loan approval or deal with financing contingencies.
  2. Simplicity: A cash sale is typically a simpler process as there are fewer steps involved, and there is no need to deal with lenders, appraisers, or inspectors.
  3. Flexibility: You can structure a cash sale to benefit you, such as negotiating a quick closing date or receiving a lump sum payment.
  4. Protection from Foreclosure: Selling a home for cash during bankruptcy can provide the owner with a way to pay off outstanding debts and avoid foreclosure proceedings.

A cash sale eliminates many of the steps involved in a traditional home sale, such as obtaining a loan approval, dealing with financing contingencies, and waiting for appraisals and inspections. In a cash sale, the buyer pays for the property in full upfront, which can lead to a faster closing process. 

What if I Have Some Left Over After I Pay Off My Mortgage? Can I Use it to Pay Off Other debts?

Yes, you can use any remaining funds after paying off your mortgage to pay off other debts. Paying off high-interest debt, such as credit card balances, can be a smart financial decision as it can reduce the amount of interest you pay over time and help you become debt-free faster. 

However, you may also want to consider saving some of the funds for emergencies or for future financial goals. It's important to have a plan for how you want to allocate the funds to make the most of them.

Does a Cash Home Sale Stop a Bankruptcy?

Selling your home for cash will not automatically stop a bankruptcy. A bankruptcy is a legal process that can only be resolved through the bankruptcy court system. Selling your home for cash will not necessarily change your bankruptcy status.

However, the proceeds from the sale may be considered part of your bankruptcy estate and may be subject to distribution to your creditors. It's important to consult with a bankruptcy attorney to understand how selling your home may impact your specific bankruptcy case.

Sell My House During Bankruptcy in DFW, Texas

If you are looking for an alternative to bankruptcy, a cash home sale may be your best option. DFW Cash for Homes can buy your house as-is and pay cash. We buy houses as-is in DFW, Texas. Call 817-881-1957 to get a fast cash offer for your home.

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