Hi everyone, hope you are all safe and healthy.
Barbisi and I are making plans for selling the home and relocating post-BK13; our final payment will be the 2nd half of January 2021.
We have a solar panels via a lease which extends until the year 2033.
When we sell the home, the panels will remain on the house.
There are a couple options we are considering.
1) Pay off the solar panels before putting the house on the market. We can only purchase the panels on the lease anniversary date, around October 03. This means, we can only purchase the panels on Oct. 03 2021; Oct. 03 2022, Oct 03, 2023.. and so forth. In this scenario, we have to notify the solar company 30-90 days in advance, of our intent to pay off the solar lease. So, between July 03 and Sept 03 of any year is our window.
In this scenario, the panels become an asset to the home, and therefore, we can add the cost to the home purchase price.
2) Pay off the solar panels during the home sale, once the house goes under contract. In this scenario, we cannot add the cost to the home purchase price. We may incur a loss due to the solar lease payoff. We could increase the initial list price, but that increase would have to be justified somehow. This scenario is not ideal.
3) The solar lease is transferred to the home buyer during the home purchase process. This is the easiest scenario, but we would also need to lower the home price since the buyer would be paying a monthly lease cost as well. Additionally, the house may remain on the market longer since a solar lease may be unappealing to buyers, and the buyer pool is reduced. Also, a potential home buyer must qualify for assuming the solar lease contract.
Option 1 would be very desirable if we could pay off the solar panels before putting the house on the market.
In October 2021, we will still be in the BK13, with 3 or 4 payments remaining in the BK13. We want to sell the house and leave the state ASAP after the BK is over, once we get the discharge in 2022. Would acquiring a 401k loan for the purpose of paying off the solar lease during the BK be considered grounds for dismissal of our BK13 plan? If we paid off the solar lease in October 2021, we would no longer have the monthly solar lease expense, which is included on the I&J forms that we filed. So, paying off the panels in October 2021, while we are still in the BK13, may not be a wise choice.
Alternatively, we could pay off the solar panels in Oct. 2022, since we should get a discharge in early 2022 (i.e. before July 03, 2022, which is the earliest date in 2022 we can notify the solar company of our intent to pay off the solar lease Oct. 03 2022). Then, we could sell the house in early 2023 (spring/summer 2023), since the panels are owned by us outright, we are out of the BK13, and the trustee no longer has jurisdiction over our estate.
Granted, a 401k loan is most often not the best option but, we should be able to sell the house for a higher price, and in a shorter amount of time, if the panels are an asset, vs. a liability.
At this point, we are only asking questions, and gathering information. Not taking any action on 401k, etc. I will be verifying with the 401k company tomorrow, if it is even possible to take out a loan. The website appears to confirm I can, but, I still want to speak with them to be sure.
Barbisi and I are making plans for selling the home and relocating post-BK13; our final payment will be the 2nd half of January 2021.
We have a solar panels via a lease which extends until the year 2033.
When we sell the home, the panels will remain on the house.
There are a couple options we are considering.
1) Pay off the solar panels before putting the house on the market. We can only purchase the panels on the lease anniversary date, around October 03. This means, we can only purchase the panels on Oct. 03 2021; Oct. 03 2022, Oct 03, 2023.. and so forth. In this scenario, we have to notify the solar company 30-90 days in advance, of our intent to pay off the solar lease. So, between July 03 and Sept 03 of any year is our window.
In this scenario, the panels become an asset to the home, and therefore, we can add the cost to the home purchase price.
2) Pay off the solar panels during the home sale, once the house goes under contract. In this scenario, we cannot add the cost to the home purchase price. We may incur a loss due to the solar lease payoff. We could increase the initial list price, but that increase would have to be justified somehow. This scenario is not ideal.
3) The solar lease is transferred to the home buyer during the home purchase process. This is the easiest scenario, but we would also need to lower the home price since the buyer would be paying a monthly lease cost as well. Additionally, the house may remain on the market longer since a solar lease may be unappealing to buyers, and the buyer pool is reduced. Also, a potential home buyer must qualify for assuming the solar lease contract.
Option 1 would be very desirable if we could pay off the solar panels before putting the house on the market.
In October 2021, we will still be in the BK13, with 3 or 4 payments remaining in the BK13. We want to sell the house and leave the state ASAP after the BK is over, once we get the discharge in 2022. Would acquiring a 401k loan for the purpose of paying off the solar lease during the BK be considered grounds for dismissal of our BK13 plan? If we paid off the solar lease in October 2021, we would no longer have the monthly solar lease expense, which is included on the I&J forms that we filed. So, paying off the panels in October 2021, while we are still in the BK13, may not be a wise choice.
Alternatively, we could pay off the solar panels in Oct. 2022, since we should get a discharge in early 2022 (i.e. before July 03, 2022, which is the earliest date in 2022 we can notify the solar company of our intent to pay off the solar lease Oct. 03 2022). Then, we could sell the house in early 2023 (spring/summer 2023), since the panels are owned by us outright, we are out of the BK13, and the trustee no longer has jurisdiction over our estate.
Granted, a 401k loan is most often not the best option but, we should be able to sell the house for a higher price, and in a shorter amount of time, if the panels are an asset, vs. a liability.
At this point, we are only asking questions, and gathering information. Not taking any action on 401k, etc. I will be verifying with the 401k company tomorrow, if it is even possible to take out a loan. The website appears to confirm I can, but, I still want to speak with them to be sure.
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