Can we sell our home to pay off the remainer of our bankruptcy?

Question

Our house is worth more than what the payoff amount is. However, it seems that there is still twice that amount in unsecured debt to the loan holders of the bank that loaned the money for the house. If we sell it will they take the money from the sell to pay that unsecured debt or will they allow us to pay off the remaining payments. We are in Kansas

Answer 1

Only those proceeds from the sale of the property which are needed to satisfy those who hold liens on the property are taken at closing. In other words, mortgage holders, tax liens, and similar. A title check of your deed will reveal just who has a lien or liens on the property.

Checking the current status of your deed and title is very important, since liens CAN be placed against your property by those unsecured creditors by filing a successful judgment against you, and then legally obtaining a lien against your property as a result of said judgment.

I tcan get quite complicated if your unsecured creditors are local and discover that your house is for sale. A 'for sale sign' would motivate creditors to try to secure such a lien in advance of the sale.

To complicate matters further, such liens can be placed on your property right up to the time of closing. You may find liens appearing against your title, or a document called a 'lis pendens' filed at the courthouse, which means that someone is seeking a lien, but that it is not yet completed and filed. A title company and a buyer's lender view a lis pendens in the same light as they do a fully filed lien. No closing will occur until such liens and lis pendens are satisfied.

Good Luck !