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The # 6 reason for choosing to file a Chapter 13 bankruptcy is that property can be sold free of liens and
encumbrances and preserve your homestead protections.
In this day of falling real estate values and mortgages which exceed the value of the property - or cases
where there have been judicial liens attached to your property, you may be able to sell your real estate
free and clear of liens and in some instances, avoid liens to protect your homestead rights under
Massachusetts General Laws.
Another reason to file a Chapter 13 is to control the sale of your real estate through the bankruptcy and
to protect what homestead rights may exist at the time of filing free from the liens and claims and
encumbrances of creditors leaving the claims to be paid from the proceeds of the sale. The Bankruptcy
Code provides the debtor with the right to sell property in a manner and at a time which can generate
the highest value. This is beneficial as when a Chapter 7 Trustee seeks to liquidate property, potential
buyers may not be inclined to make their best offer as it is seen as a forced liquidation or there may
be liens which impair your homestead rights. Obtaining the best price for property is essential for
your financial rehabilitation and in this instance, a Chapter 13 may be the best mechanism to achieve
the goal.
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