I want to sell my house in bankruptcy. Can I sell it during my Chapter 7 case?

Asked over 1 year ago - Culver City, CA

There is some equity in the house. I filed a Chapter 7 BK. I did so 1 week before the bank's foreclosure sale . Will I be able to sell the house and realize the profits instead of the bank foreclosing during my Chapter 7 case?

Attorney answers (6)

  1. Jonathan David Leventhal

    Contributor Level 13

    7

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    Best Answer
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    Answered . Only with permission of the court and only if you were able to exempt the equity.



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  2. Tiffany Nicole Romine

    Pro

    Contributor Level 11

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    Answered . I agree that the Trustee would have to abandon the property. But in most cases, if the proceeds from the sale of the property would help pay debt owed to your creditors, the court is not going to give you the money instead.


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  3. Scott Benjamin Riddle

    Pro

    Contributor Level 20

    5

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    Answered . It depends on more facts. If there is significant equity, the trustee will sell it and finds will go to creditors (and the Trustee). Even if the trustee is not interested, you won't likely be able to sell until your case is over unless the Trustee abandons the estate's interest or approves the sale.

  4. Justin Drayton Graham

    Contributor Level 13

    3

    Lawyers agree

    Answered . The first question is whether you are eligible to keep the house in bankruptcy. The answer depends on the amount of equity in the house and your available exemptions. If you can keep the house, it's probably better to sell the property after you obtain a discharge. A chapter 7 bankruptcy takes about 2 to 4 months to complete in Los Angeles. As other attorneys have noted, your house belongs to the bankruptcy estate and you would have to file a motion for authority to sell the property.

  5. William James Waters

    Contributor Level 14

    2

    Lawyers agree

    Answered . I agree with the previous answers, but wonder how sure you are that there really will be equity left over. You should look at the realistic potential sale price of the home and them subtract 8% to arrive at a good approximation of your net equity after the deduction of closing costs, etc. Whatever equity is left, if you can exempt it under the code, then you would be able to retain those funda. A sale during the BK requires a motion and approval of the court first.

  6. Brad Francis Weil

    Contributor Level 11

    1

    Lawyer agrees

    Answered . No you have to wait untill your discarge is issued and your case is closed before you can sell the property.

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