I’ve Got to Sell My House or Go Bankrupt

Do you need to sell your house or go bankrupt? Read on to learn what you need to know about selling your home to avoid bankruptcy.

Every day, ordinary Americans are staring in the face of bankruptcy. In fact, nearly 13 million Americans filed for bankruptcy during a 12-year period ending in September 2017.

The average American is suffocated by debt. Excluding mortgage debt, the average citizen holds nearly $40,000 in obligations to lenders.

A vast majority of Americans carry personal debt. Only 23 percent of households are considered to be debt-free.

For some, personal debt is like a tidal wave and is irreversible. Some of these people are faced with two options; to sell their home or to go bankrupt.

Read on to learn more about bankruptcy. Also, explore ways to sell your home quickly to avoid it.

What Does Filing Bankruptcy Mean?

Before discussing the quick sale of your home, it is important to learn about bankruptcy and why it should be avoided. The key takeaway is doing everything you can to avoid bankruptcy. You do not want to go bankrupt without playing all your cards first.

Bankruptcy is a means to stop negative actions like financial lawsuits or repossession. Perhaps most important is that the court stops creditors from garnishing your wages. The bankruptcy court also intervenes on your behalf to rearrange debts.

The goal is to establish a court-ordered plan to eliminate all debts. This typically means negotiating with lenders to establish a more realistic repayment plan.

Don’t Go Bankrupt – What Are the Disadvantages to Bankruptcy?

If given a choice, Americans should opt not to go bankrupt. There are many disadvantages to going this route.

For starters, there are many types of debt that cannot be settled in bankruptcy court. These debts are referred to as non-dischargeable. Some common examples of non-dischargeable debt include student loans and tax obligations. Alimony and child support also fall into this category.

The most significant disadvantage is bankruptcy’s negative impact on your creditworthiness. A bankruptcy filing stays on your credit report for up to 10 years. This damages your ability to secure financing for a new vehicle or student loans.

Lastly, bankruptcy proceedings require hiring an attorney with experience in this arena. This adds additional costs at a time when you are already stretched to the max.

What Are the Different Types of Bankruptcy for Individuals?

There are two types of bankruptcy that individuals can file for. The two types are referred to as Chapter 7 or 13 Bankruptcy.

Chapter 7 is the more traditional option for individuals seeking to discharge the debt. Over two-thirds of individual bankruptcies fall in the Chapter 7 category.

Under a Chapter 7 bankruptcy, you are required to forfeit nonexempt property to help pay off your debt. The requirement that sets it apart from Chapter 13 is a lack of income to resolve debts.

The court makes a determination whether you have sufficient income for a Chapter 7 filing. If you do have enough income, then the alternative is a Chapter 13 filing.

In a Chapter 7 bankruptcy, the objective is not to eliminate all debt. Instead, the goal is to restructure debt so that payments can be made.

Typically, this involves extending payment terms with creditors. This way, you can make smaller monthly payments and pay off the debt over a longer period of time.

Why Should I Sell My Home to Avoid Bankruptcy?

In today’s debt-driven society, many Americans use their home as a savings account. As the principal is paid down on a mortgage, you are building up equity in the home.

When you sell, this equity is made liquid. The difference between the sale price and the remaining mortgage debt is cash in your pocket.

In addition to closing the mortgage, this cash can also be used to settle existing debts. To not go bankrupt, selling your house is sometimes the last resort.

How Can I Sell My Home Quickly?

In order to not go bankrupt, you will need to sell your house quickly. The average time it takes to sell a house on the real estate market is three weeks.

However, this time could increase when the real estate market cools off. In 2012, the average time it took to sell a home was 11 weeks.

There are a number of different strategies you should take to sell faster than the national average. Read on to learn more about each real estate tactic.

Price to Sell

The most important factor for selling quickly is the list price. Facing potential bankruptcy, you do not have the luxury of listing the home above market value.

If the listing price is too high, potential buyers are turned off. In fact, you may need to offer it at a discount to speed up the process. Send a signal to home buyers that you are serious about offloading quickly.

Sell to an Investor

There are investors interested in flipping your home. This is one of the fastest ways to sell your property.

These investors have the ability to purchase with cash. This eliminates a lot of paperwork and avoids the lengthy financing process.

Clean Up

You don’t have time or money to plant flowers or hire a professional stager. The most effective strategy on a limited budget is to clean up.

Clean the yard of any debris or junk. Also, mow the yard and trim the hedges.

Now that you have cleaned up the outside, turn your sights inward. Remove any unnecessary clutter and give your home a thorough spring cleaning. You will be surprised at how effective this is.

Showcase Great Photos

The real estate market is now driven by online searches. Homebuyers prefer to shop for houses on the couch.

This makes your listing’s home photographs all the more important. Real estate agents typically do a great job with photographs. If you are selling for sale by owner, make sure to use high-quality photos with great resolution.

Flexible Showing Schedule

If a buyer loves your home photos, they will take the next step and schedule a showing. If you want to sell quickly, you need to be super flexible.

Do everything possible to not turn down a showing opportunity. One option is to put a keypad lock on the front door so real estate agents can show the property while you are out.

A Recap of Selling Your House to Avoid Bankruptcy

Your home is a major financial asset. If you have lived there for a long time, there may be significant equity in the property.

Selling your home quickly may be the solution to avoiding bankruptcy. If you are interested in selling your home so you don’t go bankrupt, please contact us to schedule an appointment today.