Can we sell our home and if so, what would be the consequences? 22 Answers as of August 15, 2014

We filed Chapter 7 and this was discharged in June of 2012. Our home mortgage was discharged and we are still the legal owners of the property. There has been no indication of foreclosure for over two years.

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Mauritz Van Niekerk, Attorneys at Law
Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
Yea you can sell it but it would be subject to the mortgage lien still.
Answer Applies to: New York
Replied: 8/15/2014
A Fresh Start
A Fresh Start | Dorothy G Bunce
As long as your Chapter 7 case is closed, you can sell your property as if you had never filed bankruptcy, provided that you did disclose your home ownership in your bankruptcy & claimed an exemption for any equity in the property. The fact that you are discharged does not mean your Chapter 7 case closed. You will want to go to the courthouse, contact your attorney, or sign up for an account with www.pacer.gov to look at your file to see whether or not your Chapter 7 is closed. If not closed, you will need court permission to sell.
Answer Applies to: Nevada
Replied: 8/12/2014
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
You can sell it, no problem.
Answer Applies to: California
Replied: 8/11/2014
GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
You are free to sell your home.
Answer Applies to: Colorado
Replied: 8/7/2014
Tokarska Law Center
Tokarska Law Center | Kathryn U. Tokarska
This is an open ended question, difficult to answer with minimal facts but I'll do my best. Having filed and received a discharge in bankruptcy does not prevent a homeowner from selling their property. What the consequences of the sale are (financial or otherwise) depends on additional facts: how much is owed on mortgage(s), whether there are any other recorded liens against the property and for how much (liens can be statutory: like for income taxes or judicial: for example credit card recorded their judgment), what is the market value of the property, and perhaps the most important question: whether you reaffirmed your mortgage(s) in your bankruptcy case. If an attorney handled your bankruptcy case, chances that any mortgages were NOT reaffirmed as I do not know any attorney who would recommend doing that to their client. You can ask your attorney or you can verify this by checking the bankruptcy documents accessible online at www.ecf.gov. A reaffirmation is not effective unless it has been signed and filed with the court. In Southern District of California, if on the bottom of schedule J a debtor has negative disposable income and the court receives a signed reaffirmation agreement the court will schedules a hearing on the matter to determine if the agreement will be approved. In that situation, only if the Judge approves the reaffirmation agreement does it become effective. If the bottom of schedule J indicates that the debtor has sufficient money to afford the mortgage payments the reaffirmation agreement could become effective without a hearing. Hope this information helps. Good Luck.
Answer Applies to: California
Replied: 8/7/2014
    EDWARD P RUSSELL | EDWARD P RUSSELL
    A bankruptcy does not transfer property so that since you still own the home you may sell it. The bankruptcy discharged the mortgage debt itself but the lien that your mortgage company had on the property survives the bankruptcy. As long as you continue to pay the mortgage company in accord with the mortgage they cannot foreclose. When you sell your home the mortgage company will receive the value of the lien, I.e., the balance remaining on the mortgage, from the proceeds of the sale.
    Answer Applies to: Minnesota
    Replied: 8/7/2014
    Steele, George, Schofield & Ramos, LLP
    Steele, George, Schofield & Ramos, LLP | Alan E. Ramos
    Given what you have said, you should have no problems selling your home. That assumes that there is equity in the property. If there is no equity, you will need the lender to approve a short-sale.
    Answer Applies to: California
    Replied: 8/7/2014
    Barnes Law Firm, LLC | Aunna Peoples
    You are still considered the legal owner or owner of record on the property and until there is a foreclosure. You are still responsible for maintaining the property as for as your local municipality is concerned so many find it easier to just sell the property when the mortgage company won't foreclose.
    Answer Applies to: Missouri
    Replied: 8/6/2014
    Moore Taylor Law Firm, P.A.
    Moore Taylor Law Firm, P.A. | Jane Downey
    Your discharge does not prevent you from selling your home.
    Answer Applies to: South Carolina
    Replied: 8/6/2014
    Ronald K. Nims LLC | Ronald K. Nims
    The mortgage lender still has a lien on the property, you can't legally sell the property without paying off that lien. Since you haven't been making payments for over two years, the amount of the lien with interest and late payment penalties has probably soared. You can approach the lender and find out if they are interested in a short sale, where they will release the lien for less than full value. Since they haven't foreclosed, this option gives at least some of their money back and they might be interested.
    Answer Applies to: Ohio
    Replied: 8/6/2014
    Law Office of J. Thomas Black, P.C.
    Law Office of J. Thomas Black, P.C. | J. Thomas Black
    Yes, if you still own your home you should be able to sell it. We have had issues with clients being able to get payoff quotes from their lenders, or being delayed by that. Be sure that your chapter 7 case is not only discharged but closed. Depending upon how much equity that you have in your house and whether you chose Texas or federal exemptions, if your bankruptcy case is not yet closed, the bankruptcy Trustee could potentially take your equity unless you reinvest the proceeds in another homestead within 6 months. If you bankruptcy case is not only discharged but closed, you should be OK.
    Answer Applies to: Texas
    Replied: 8/7/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    You can sell but you have to order a payoff letter from the bank. If you sell for less than you owe then you need an attorney to negotiate a short sale. If you sell for more than what you owe the bank then you keep the difference.
    Answer Applies to: New York
    Replied: 8/7/2014
    Thomas Vogele & Associates, APC | Thomas A. Vogele
    There is a great deal of confusion regarding mortgages and bankruptcy. Even though you may have discharged your personal obligation to the mortgage holder, the lien remains on the property and if you try to sell it, the mortgage will have to be paid or the new buyers will not get clean title. If you have a second or third mortgage, the same holds true on those. The personal obligation is discharged but the lien remains. Good luck!
    Answer Applies to: California
    Replied: 8/6/2014
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    Contrary to what some people believe, the mortgage against your property is not discharged in the overwhelming majority of Chapter 7 cases. While this author can think of some scenarios under which a mortgage could be avoided and then discharged likely by a Chapter 7 trustee, the traditional home mortgage is not usually in that category. In other words, if you want to sell the property, you most likely will still need to pay that mortgage to convey good title to the purchaser. To do that, you will need to get a payoff quote from the holder of the mortgage who will then have to release/reconvey its lien.
    Answer Applies to: California
    Replied: 8/6/2014
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    You can sell. It has nothing to so with the bk as long as you case has been closed. If it has lot been closed then you will need to get the trustee to abandon the property.
    Answer Applies to: Nevada
    Replied: 8/6/2014
    Meister & McCracken Law Firm, PLLC | Joanne M. McCracken
    Although your personal liability for the mortgage has been discharged, the mortgage lien still exists. If you were to sell your house the mortgage holder would get paid before you realize any funds from the sale. Why not continue living there and not making payments for as long as you can until the creditor forecloses.
    Answer Applies to: Arkansas
    Replied: 8/6/2014
    Barnhart Law Office
    Barnhart Law Office | Bruce C Barnhart
    Yes, you may sell your home. As long as the home was listed as an asset and the trustee has abandoned his interest in the home.
    Answer Applies to: Nebraska
    Replied: 8/7/2014
    Law Offices of Eric W. I. Anglin
    Law Offices of Eric W. I. Anglin | Eric W. I. Anglin
    You may sell the house but the mortgage lien must be satisfied or you will need the mortgage company's approval
    Answer Applies to: Indiana
    Replied: 8/6/2014
    Detroit Lawyers, PLLC
    Detroit Lawyers, PLLC | Nick Best
    Filing Chapter 7 can wipe out your obligation to pay the mortgage (unless you signed a reaffirmation agreement) but the lien is still attached to the property so the bank would still be able to foreclose on the property if you stopped making payments.
    Answer Applies to: Michigan
    Replied: 8/7/2014
    Marc S. Stern
    Marc S. Stern | Marc S. Stern
    Make sure that the case is closed and the house abandoned. There are 2 parts of every bankruptcy. The first is discharge. The debts are listed and, if there are no objections, a discharge is ordered. This is approximately 60 days after the ? 341 hearing. There is another part of the bankruptcy that many people forget. This is administration. When a bankruptcy is created, an estate is created. The estate consists of virtually all of the property of the debtor. It is more complicated than that but this will suffice for this answer. When the trustee issues a no asset report and the case is closed, the property that was scheduled is abandoned. It is within the control of the debtor again. It may also be abandoned by order of the court during administration. Until it is abandoned, it is subject to the control of the trustee. Again, it is much more complicated than this. This is a much simplified explanation.
    Answer Applies to: Washington
    Replied: 8/7/2014
    Law Office of Shawn N. Wright | Shawn N. Wright
    Your Chapter 7 case is over, and you are free to do with your property what you wish. Good luck with your sale,
    Answer Applies to: Pennsylvania
    Replied: 8/6/2014
    Danville Law Group | Scott Jordan
    You can sell the home now. However, although the mortgage may have been "discharged" the bank's lien on the house probably remains and is valid. You will have to pay the mortgage bank in full through the sale.
    Answer Applies to: California
    Replied: 8/7/2014
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