Selling a house during bankruptcy
My husband and I had to declare bankruptcy. He has been discharged, and I am still in it. It was his first time being bankrupt and my second time. I would like to know what the laws are if we decide to sell our house during the time before I have been discharged. Can they only collect for the balance outstanding that I owe or can they try to collect on anything my husband has been discharged from? If the amount from the sale of our house is enough to pay the balance we owe, can we then keep any proceeds left over from the sale? Would this in any way change my credit history if the debts have been paid? Would it improve our chances of getting another mortgage?
This is a matter you should discuss with your trustee, since without all of the facts we cannot give you a specific answer.
In general, if your trustee determined that there was no equity in your house when you went bankrupt, the trustee did not object to you keeping your house. However, if you sell it before you are discharged from bankruptcy, and there are proceeds from the sale, the trustee will probably want your share of the proceeds to distribute to your creditors.
Having a mortgage in good standing may help your credit rating, although whether or not you can get another mortgage will depend on a number of factors, including when your bankruptcy ends, what your family income is, and the amount of your down payment.