Can I sell my current home not reaffirmed? Is this the right thing to do?

[Debtnogood]

Hello, I posted previously about whether or not we should reaffirm our home and from the advice we received we decided not to reaffirm. Our discharge is still less than a month away and our question is can we try to sell our current home and lease another one? Our case is a no asset case and trustee has already filed a report of no distribution on our case. We only have about 8k equity in our current home and it is exempt. Do we have to wait until discharge to sell and sign a new lease? I called my attorney, but can't speak with him today, so came here for advice. Any advice would be great, thanks!

[justbroke]

The best things to do is wait until the discharge so that the home is completely clear from the bankruptcy estate. If the Trustee abandoned all the assets as part of the report of no distribution, you could sell it now. I would just personally wait. Also you could, if you wanted, stay in the home and stop paying while you save money for your move. You could offer a deed-in-lieu to the bank as well. I don't know what the cost to sell would be, but you may even look at a short sake (because $8K in equity is barely enough to cover commissions (6%) and title insurance (1-2%) and partial year taxes ($$$) on a $100K home).

May I ask why are you moving?

[Debtnogood]

Justbroke, we are wanting to move because our current home needs too many repairs and the property taxes are going up and we can't afford to repair the home and keep paying the taxes. Renting would be cheaper without the taxes and the up keep and we plan to rent for 2-4 years and eventually buy another home when we are in a better financial position.

[justbroke]

That is definitely a decent plan for your part. The key would be getting the property out of your name quickly. That is why I suggested short sale, or deed in lieu of foreclosure. You can discuss those with your Realtor. You'll likely need 2 years from the foreclosure to the time you buy under FHA unless the Back to Work or other programs are still in place.

I suppose you could start lining up a Real Estate Agent to start giving you some ideas. You may want to find a Realtor that is experienced with short sales. After you case is discharged and closed, you may want to contact the bank to see if you can offer a "cash for keys" (and/or deed-in-lieu) so that you can have this behind you.