Skip to main content

Can I sell my house while in chapter 7?

San Diego, CA |

I am at the end stages of chapter 7, just got a buyer for my house do I get permission from the Bk trustee or the court? Meeting of the creditors is scheduled for 4/30/12,(a continuance) just need to show them 1 more document, have complied with everything else.

Attorney Answers 4


  1. Best answer

    Yes, you need approval and it can be difficult to get the Trustee to release the property early. The best course of action is to enter into a binding contract after the case closes, typically in San Diego the court is very prompt, discharge happens almost exactly on 90th date after filing & the Trustees are also pretty good in issuing their blessing so the case can officially close. Most real estate agents won't touch a property while it is part of a bankruptcy estate. You also can't get a car loan or even execute a lease agreement on an apartment until after the discharge.


  2. Agreed. Wait until the case closes and if you get the Trustee everything he or she needs at the continuance then the case should close on time which is 90days after filing. Most realtors will explain to the buyers that there is an ongoing chapter 7 but that it will close within 90 days. Then you can close the sale of your home. It is easier to wait than to get permission from anyone involved in the case.


  3. In our court we either would need the trustee to abandon the estates interest in the house or get the trustee to notice the sale if the estate is getting some non-exempt proceeds from the sale. if there are non-exempt proceeds the trustee would likely require that the property be listed with his real estate agent( whose employment would first have to be approved by the court).

    The answer above is for general information purposes only. You should talk to an attorney to determine your specific legal rights.


  4. The more cost efficient solution is to wait it out, as the other attorneys have suggested. You could also seek an abandonment of the property, but really its for the benefit of the other parties. Generally, the since you are already going to receive a discharge of the mortgage liability, the benefit of the early abandonment and sale of the property would be to the purchaser and the real estate agent.

    There was a circumstance where a debtor was a co-owner of a property, where the other owners were not in bankruptcy, need a short sale to get approved. We had to seek the early abandonment to prevent the buyer from walking. If you have more complicated considerations, its best to work these issues out with your bankruptcy attorney. Best of luck.