Bankruptcy: What You Can Do to Protect Your Lexington Home
For those who have significant debts, filing for bankruptcy may be the best option for you. Although some may see differently, bankruptcy is a way to forgive your debts, gain a clean slate, and rebuild your financial stability.
It’s a long and challenging process that’s best done with an attorney specializing in bankruptcy in Lexington, KY. If you’re wondering what bankruptcy can do to your property, it’s best to consult with your lawyer about your available options depending on your finances. But here are some of the possible outcomes that could happen depending on which bankruptcy chapter you apply for.
Chapter 7, 12, and 13
Unlike other states, Kentucky residents have three types of bankruptcy chapters they can file for: Chapters 7, 12, and 13.
Under a Chapter 7 bankruptcy, all your non-exempt properties are liquidated. This means your assets will be sold or auctioned off, and the proceeds will be used to pay off your debts. The court will decide which of your debtors get paid first and how much. If all your properties are liquidated and you still have remaining debt, these debts will be considered forgiven. This is usually the best option for people with less income.
Chapter 12 bankruptcy is reserved for family farmers in agricultural states like Kentucky. Under this bankruptcy chapter, family farms and fisheries can re-organize their debt while maintaining their operations and livelihood.
With Chapter 13 bankruptcy, you can avoid liquidating your assets by reorganizing your debts into a feasible payment plan. This chapter is for those who have reliable income and can pay their debts within the next three to five years but are overwhelmed with multiple debts.
Liquidate Your Property
Under a Chapter 7 bankruptcy, you may be required to liquidate your home if it does not fall under exemptions. For Kentucky law, you are allowed to choose federal or state bankruptcy exemptions, so depending on your situation, it may be possible to keep your home if it falls under the exemption criteria. However, if it does not fall under these exemptions, it is considered non-exempt and can be liquidated and used to pay off your creditors.
Keep Your Home
If you file for a Chapter 12 or Chapter 13 bankruptcy, it is possible to keep your property. However, you need to meet certain criteria to file for these types of bankruptcy, so discuss with your lawyer if this option is possible.
Depending on your monthly income, the court will restructure your debt and require you to pay off your debt within up to five years. It’s a win-win situation, as you get to keep your property while your creditors can be paid.
Sell Your Home to a Professional Home Buyer
Under a Chapter 13 bankruptcy, you have the option to keep your property and repay your debt within the given time period. However, if you find that selling your home can ease your financial burden and give you the means to pay off your debt, you could sell your home or any other real estate property in Lexington, KY that you have.
The downside to selling property on the real estate market, however, is that you don’t know how long it will take to sell. On top of that, you also have the costs of selling a home – costs you may not be able to afford while repaying your debt. That’s why selling to a professional homebuyer is the best solution.
At Rylo Homes, we buy houses in Lexington, KY at a quick turnaround time. Aside from buying homes as-is – which means no repair and renovation costs necessary on your end – we do not charge you for commissions or closing costs, making us the more cost-effective option than selling on the market. We also have a fast turnaround time: get a fair cash offer from us within 72 hours of viewing your property. After you accept, we can close the sale in as little as 14 days.
Contact Rylo Homes Today for More Information
There are many possible outcomes for your property when filing for bankruptcy. To narrow down which possibilities apply to you, it’s best to discuss this with your bankruptcy lawyer. But if you’re looking to sell your home fast and for a fair price, there’s the professional homebuying team at Rylo Homes.
Contact us today to learn more and schedule a property viewing.