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Selling Property that is included in Ch 13 plan

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  • 08-17-2005, 03:21 PM
    cathijk44
    Selling Property that is included in Ch 13 plan
    Our Ch 13 Plan was just confirmed a month ago and now we are wanting to sell our house. Part of our Ch 13 plan includes back payments owed to our mortgage companies (we have a 1st and 2nd lien) and my question is if we sell and get our Trustee's approval for the sale do we have to relinquish any of the sale profit to our plan payment? Or do we just pay off the current payoff to our mortgages and continue paying our plan payment which will eventually pay back that owed money?

    Also, are we prevented from obtaining another mortgage until our Ch13 plan is dishcharged?
  • 08-17-2005, 04:33 PM
    aaron
    Selling Home During Chapter 13 Bankruptcy Plan
    It is unlikely that any title insurer would proceed with a sale unless the transaction has been approved by the Chapter 13 bankruptcy trustee. To get approval, the trustee would typically require that you submit documentation including the purchase agreement and an updated budget. Depending upon the circumstances, the trustee may require that some or all future plan payments be made from exempt proceeds from the sale. The trustee may take non-exempt proceeds without reducing the number or amount of plan payments.

    If by "obtaining another mortgage" you mean refinancing or purchasing a different home, then no, you aren't prevented from obtaining another mortgage. But your bankruptcy trustee will ordinarily want documentation (including an updated budget) from you before approving the purchase or refinancing of a home.
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