Home Equity Options When Considering Bankruptcy
Financial challenges can lead homeowners to consider bankruptcy and evaluate how their home equity fits into their financial circumstances. Before making decisions involving their property, homeowners should understand the available options and consult a qualified bankruptcy attorney.
Home equity may be an important consideration in bankruptcy proceedings, and the treatment of that equity depends on applicable laws, the homeowner’s financial circumstances, and the type of bankruptcy being considered.
Home Equity Options When Considering Bankruptcy
Financial challenges can lead homeowners to consider bankruptcy and evaluate how their home equity fits into their financial circumstances. Before making decisions involving their property, homeowners should understand the available options and consult a qualified bankruptcy attorney.
Home equity may be an important consideration in bankruptcy proceedings, and the treatment of that equity depends on applicable laws, the homeowner’s financial circumstances, and the type of bankruptcy being considered.
Understanding Home Equity and Bankruptcy
Home equity generally represents the difference between a property’s market value and the outstanding mortgage balances or other obligations secured by the property.
Depending on the circumstances, home equity may affect a homeowner’s bankruptcy options, available exemptions, and the treatment of assets during the bankruptcy process.
A bankruptcy attorney can help homeowners understand how these rules apply to their situation and whether any proposed property transaction could affect their rights or obligations.
What Options May Be Available?
Homeowners evaluating bankruptcy may consider several alternatives or related financial strategies, depending on their circumstances.
Debt Repayment or Negotiation
Some creditors may offer repayment arrangements or negotiated settlements, depending on the type of debt and the homeowner’s financial situation.
Home Equity Loans or Refinancing
Homeowners with sufficient equity who meet applicable credit and income requirements may be able to explore traditional financing options.
Selling the Property
A traditional home sale may provide proceeds that can be used to satisfy outstanding obligations, subject to applicable legal requirements.
Bankruptcy Protection
For some homeowners, bankruptcy may provide important legal protections and a structured process for addressing debts. Whether Chapter 7 or Chapter 13 is appropriate should be evaluated with a qualified bankruptcy attorney.
Buy Before You Sell
Need access to your home’s equity before selling? Our program can help create greater flexibility for your next move.
Alternative to Home Refinancing
If traditional refinancing is not available, a residential sale-leaseback may provide another way to access your home’s equity.
Property Tax Liens
Property tax obligations can create financial pressure. Accessing your home’s equity may provide another option for qualified homeowners.
Managing Financial Challenges
Financial challenges can make traditional financing difficult. A residential sale-leaseback may provide another way for qualified homeowners to access their home equity.
How the Residential Sale-Leaseback Program Works
SKYDAN™ is here to help you tap into your home’s equity to free up any tied up funds.
Qualify
Eligibility is based on property equity and other program requirements, rather than traditional loan approval.
Home Visit
After initial qualification, we will schedule a time to visit your property within 1-3 days.
Appraisal
Within 3-5 days, we determine how much cash you will receive, based on your property’s value.
Payment
Within 30 days or less, you will receive the agreed-upon amount of money.
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Understanding Residential Sale-Leaseback Transactions
For homeowners with substantial equity, a residential sale-leaseback may be another type of real estate transaction worth discussing with their attorney.
Under SKYDAN Equity Partners’ Residential Sale-Leaseback Program, qualified homeowners sell their property to SKYDAN and continue living in the home under a lease agreement.
Monthly rent payments are deferred, meaning homeowners do not make monthly rent payments during the agreed lease term. Deferred rent accumulates and becomes part of the amounts payable under the transaction documents.
The program provides two potential paths:
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Repurchase the Property: Homeowners have a contractual option to repurchase the property at the applicable option purchase price, which includes deferred rent and other amounts specified in the agreement. Financing to complete a repurchase is not guaranteed.
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Sell the Property: If the property is sold to a third party, homeowners may receive remaining net proceeds after SKYDAN’s contractual amounts and applicable selling costs are paid.
Ownership transfers to SKYDAN at closing. Homeowners should carefully consider the financial implications, lease obligations, repurchase terms, and available alternatives before proceeding.
Important: If you are considering bankruptcy or have already filed, consult your bankruptcy attorney before entering into any agreement to sell or transfer your property. Depending on the circumstances, a proposed transaction may require additional disclosures, legal review or court authorization.
Home Equity and Bankruptcy Consideration FAQs
Does SKYDAN provide bankruptcy payoff or debt-relief services?
No. SKYDAN offers a Residential Sale-Leaseback Program structured as a real estate transaction. It does not provide bankruptcy representation, debt settlement, credit repair, or lending products.
Can a sale-leaseback prevent bankruptcy?
A sale-leaseback does not guarantee that bankruptcy will be avoided. Whether a property sale is appropriate depends on your circumstances and should be discussed with a qualified bankruptcy attorney.
Can I sell my home if I have already filed for bankruptcy?
Do not assume you can proceed with a sale independently. An active bankruptcy case may require court approval and other procedures. Consult your bankruptcy attorney before signing an agreement.
Can I stay in my home after a SKYDAN sale-leaseback?
Yes. Qualified homeowners can continue living in the property under a lease agreement for the agreed-upon term, subject to SKYDAN's eligibility and program requirements.
Can I purchase my home back after a SKYDAN sale-leaseback?
Do I have to make monthly rent payments?
Under SKYDAN’s current program, rent is deferred until the end of the agreement, so no monthly rent payment is due during the lease term. The lease period is mutually agreed upon and may extend for up to two years.
Residential Sale-Leaseback Service Areas
Illinois
Ohio
Indiana
Florida
Wisconsin
Arizona
Learn More About Home Equity
Understanding the differences between refinancing, home equity loans, HELOCs, home equity agreements, and sale-leaseback programs can help you evaluate which options may fit your circumstances.
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See If a Residential Sale-Leaseback Is Right for You
SKYDAN Equity Partners offers a residential sale-leaseback program for qualified homeowners seeking an alternative way to use their home equity while continuing to live in their property.
Eligibility depends on property equity, condition, title status, location and applicable program requirements. Not every homeowner or property will qualify.
SKYDAN is accredited by the Better Business Bureau, and homeowners can review customer experiences through Google and BBB reviews.