What is the procedure for selling a home during bankruptcy?

In bankruptcy proceedings, your home can be one of the exempted assets, which is necessary before you can commence the sale procedure. To know if this is an exempt asset, you need to list the property in the schedule of assets and liabilities that you will file along with the bankruptcy filing. You will also list the home as an exempt asset. If this is the case in the state where you are in and there are no objections from creditors, then, the trustee will abandon the asset, giving you authority to dispose of it as you see fit.

The procedure for selling home bankruptcy is slightly different when compared to a sale process that is done regularly. You will first need to find a buyer for your home. If you already have a buyer, the sale cannot be done on your own but through the bankruptcy trustee. The trustee will want to maximize the amount of the sold asset. Take note that the proposed buyer may not end up owning the home if the trustee finds a better and higher offer.

After the sale is completed, the proceeds will be subjected to the exemption allowed in your state. If it is $100,000 then you get that amount while the rest will be made part of the estate's assets. Along with the other sale proceeds, the total liquidation amount will be distributed to creditors. Secured claims, priority claims, and administrative claims are to be satisfied first before unsecured creditors can get paid.