Sell My House Fast During Bankruptcy
Filing for bankruptcy is a major decision, and what happens to your home is a primary concern. Understand the difference between Chapter 7 and 13 and how selling your property might be a strategic part of your financial fresh start.
Important Legal Disclaimer
We are not attorneys or financial advisors. The information on this page is for educational purposes only. You must consult with a qualified bankruptcy attorney to receive advice about your specific situation. We are happy to work with you and your attorney to provide a property solution if it fits your legal strategy.
Chapter 7 vs. Chapter 13
Chapter 7 (Liquidation)
For those with little income and few assets.
Often called 'liquidation' bankruptcy. A trustee is appointed to sell your non-exempt assets to pay off creditors. If your home has significant equity, the trustee may sell it.
Chapter 13 (Reorganization)
For those with regular income who want to keep their assets.
Allows you to create a 3-5 year repayment plan to catch up on debts, including mortgage arrears. This can stop foreclosure and allow you to keep your home, but you must make the plan payments.
Can You Sell Your Home During Bankruptcy?
Yes, you can sell your home during bankruptcy, but you NEED court approval.
The process is different for each chapter:
- In Chapter 7: The trustee controls the sale. They will sell the property if it has enough non-exempt equity to pay creditors. A private sale is sometimes possible if it yields more for creditors than the trustee's sale.
- In Chapter 13: You (the debtor) have more control. You must file a 'Motion to Sell Property' with the court. The sale price must be fair, and the proceeds will be used to fund your repayment plan and pay off liens.
Frequently Asked Questions
Does filing bankruptcy automatically stop a foreclosure?
Yes, filing for either Chapter 7 or Chapter 13 creates an 'automatic stay,' which immediately halts all collection activities, including a pending foreclosure sale. However, this is often temporary. The lender can file a 'Motion for Relief from Stay' to ask the court for permission to continue the foreclosure.
Why would I sell my house during bankruptcy?
Selling can be a strategic move. It can generate cash to fund a more favorable Chapter 13 plan, pay off priority debts, or, in a Chapter 7, ensure you get your homestead exemption in cash rather than letting the trustee control the sale and pay high fees.
Is it complicated to sell a house in bankruptcy?
It is more complicated than a regular sale because it involves your attorney and the court. That's why it's crucial to work with a buyer who has experience with bankruptcy sales and can be patient with the court approval process.
This is confusing. What should I do first?
Your first and most important step is to consult with a qualified bankruptcy attorney. They can provide legal advice specific to your situation. We can then work with you and your attorney to provide a fast cash offer that can be part of the solution your attorney recommends.
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We work with homeowners and their attorneys to provide fast, reliable cash offers that can help achieve a successful bankruptcy outcome.
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