After filing chapter 7 bankruptcy, Can I sell my house?

If you file for Chapter 7 bankruptcy, a certain amount of equity in your home is exempt.  The homestead exemption protects equity that you have in your home up to a certain amount, which varies in each state.  If you have a certain amount of equity, you may want to consider Chapter 13 reorganization bankruptcy instead of a Chapter 7 liquidation bankruptcy.

When you file a Chapter 7 bankruptcy and intend to keep your house, you will need to “reaffirm” the mortgage with the lender.  By reaffirming the debt, you agree to continue making mortgage payments after the bankruptcy.

If you wish to sell your house before your Chapter 7 bankruptcy is discharged, you will need to obtain permission from the court or trustee of your case in order to sell or refinance your home.  Once your bankruptcy is discharged, there are important considerations to take into account when selling your home.  All of the money made in the sale will go towards paying any liens or judgments that remain on the property.  Some people who declare bankruptcy elect to sell their home in order to simplify their finances and get rid of an expensive mortgage.  Before making any decisions, it is best to speak with an experienced bankruptcy attorney in your state.