Can you sell a house that is in a Chapter 7 bankruptcy? 29 Answers as of August 26, 2011

Can you sell my house with a short sales that's in a Chapter 7 bankruptcy?

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Heupel Law
Heupel Law | Kevin Heupel
Yes, you can short sale your home in a Chapter 7, but need to file a motion to abandon so the bankruptcy court can issue an order permitting the sale of the home.
Answer Applies to: Colorado
Replied: 8/26/2011
The Law Office of Jacqui Snyder
The Law Office of Jacqui Snyder | Jacqui Snyder
You should get permission from the trustee handling your case. Your attorney can do this if you have one. Be prepared with the amount it will be selling for, who is selling it for you, and what their fees will be. Normally the process is so slow that the trustee will be out of the picture before the sale actually happens.
Answer Applies to: Ohio
Replied: 8/18/2011
The Law Offices of Kristy Qiu
The Law Offices of Kristy Qiu | Mengjun Qiu
Creditors can't sale your house if you're in bankruptcy. You can't sell your house during your bankruptcy case unless the trustee specifically abandoned it and you intend to use the proceeds to purchase a new homestead. The trustee may or may not sell your house if you didn't claim it as homestead, depends on how much equity there is in the house.
Answer Applies to: Florida
Replied: 8/12/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
Yes. Of the Trustee releases all interests in the property you can sell it at Short Sale during Chapter 7.
Answer Applies to: New Hampshire
Replied: 8/11/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
You can if the trustee has "abandoned" it. Check with the trustee before you do anything like that.
Answer Applies to: California
Replied: 8/11/2011
    Dan Wilson Bankruptcy
    Dan Wilson Bankruptcy | Dan Wilson
    Why would you want to a short sale? There is no benefit to you. I assume you are not trying to keep the house. Why not live there rent free until lender forecloses? Your question is not clear whether you have filed. If you have, your house is part of the bankruptcy estate which the trustee controls. You cannot dispose of property until you get your discharge of debts and the case is closed. I do not see any advantages to a short sale. In my humble opinion they are usually pushed by realtors, who don't know much about bankruptcy law, to get a commission. I am not saying there is no potential fact pattern where a short sale would benefit the debtor, I've just never seen one. Talk to the attorney who filed your bankruptcy.
    Answer Applies to: Colorado
    Replied: 8/11/2011
    Theodore N. Stapleton, PC
    Theodore N. Stapleton, PC | Theodore N. Stapleton
    Yes if the chapter 7 trustee agrees to abandon the estate's interest in the house. I am happy to discuss these issues with you.
    Answer Applies to: Georgia
    Replied: 8/11/2011
    Rhonda R. Werner Schultz, PL
    Rhonda R. Werner Schultz, PL | Rhonda R. Werner Schultz
    If the Trustee has abandoned the property during your Chapter 7 bankruptcy you have a right to sell it. It is typically wise to notify the trustee of the intention to short sale and ask if he or she has any objection to such sale.
    Answer Applies to: Wisconsin
    Replied: 8/11/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    You have to have the court and the trustee's permission. Most won't give it because it is redundant, you already discharge the debt, why would you want to go through with a short sale?
    Answer Applies to: Michigan
    Replied: 8/11/2011
    Ray Fisher Law Offices
    Ray Fisher Law Offices | Ray Fisher
    A house is never "in a bankruptcy." You file bankruptcy. A house cannot. Yes you can sell a house while you are in bankruptcy.
    Answer Applies to: Texas
    Replied: 8/11/2011
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    As long as the trustee has no objection.
    Answer Applies to: Michigan
    Replied: 8/11/2011
    Melinda Murphy Dionne, PC
    Melinda Murphy Dionne, PC | Melinda Murphy Dionne
    I'm not sure why you would want to short sell a house in a Chapter 7 case. In fact, I would advise against it. When you receive your Chapter 7 discharge, you will be forgiven for any indebtedness owed on the house. I would be concerned that short selling a house after you file Chapter 7 could give rise to tax liability that would survive your bankruptcy case.
    Answer Applies to: Alabama
    Replied: 8/11/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    No and there is really no good reason for a short sale if you are filing a Chapter 7 case. Just surrender the property in bankruptcy. There are tax consequences from short sales that you will not have in bankruptcy (particularly in investment property) and there is liability you may have if you short sale a house and the buyer late sues you for defects in the property. Bankruptcy will not protect you from liability after you file the case and you cannot file again another Chapter 7 case for 8 years. Bottom line is that only the real estate agent gains from a short sale if you are filing a bankruptcy case anyway. If you insist on doing a short sale then just wait until the Chapter 7 case is over in about three months after you file.
    Answer Applies to: California
    Replied: 8/11/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    If you want to sell a house while in chapter 7 you must first get permission from the trustee.
    Answer Applies to: California
    Replied: 8/11/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    If the trustee abandons. But why.bother? You'll have no obligation on it.
    Answer Applies to: Virginia
    Replied: 8/11/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    No, unless the court approves it. And generally that would be a completely bad idea, since the bankruptcy can discharge the debt anyway. The only time you might try is, with your lawyer (and if you do not have one - get one - you need one NOW), and the Trustee in agreement, you might be able to get a short sale through that puts some cash in your pocket AND creditors' pockets. This is complex, and would require an agreement between two sides and a court order. You can't do it on your own. You MAY in an unusual case find ways with counsel to get a small windfall. In other words, it can cost you money to be pro se.
    Answer Applies to: Georgia
    Replied: 8/11/2011
    Law Office of J. Scott Logan, LLC
    Law Office of J. Scott Logan, LLC | John Scott Logan
    Yes, but you would want the Chapter 7 Trustee's permission. Moreover, the lender may ask you to sign a promissory note, which would be a substantial new debt.
    Answer Applies to: Maine
    Replied: 8/11/2011
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    Yes
    Answer Applies to: Florida
    Replied: 8/11/2011
    Edward Papa, Esq.
    Edward Papa, Esq. | Edward Papa
    It is possible but your case trustee needs to abandon the property. It is not a simple matter and you may need an attorney to make a motion for relief from stay. The buyers attorney and title company will let you know what is required. Why would you want to do the short sale if you are already in Ch. 7 ? Think carefully about this, do a little cost-benefit analysis. What is in it for you ? Short sales are usually nightmares to get to closing. Is it worth it? Why not just move on with your life ?
    Answer Applies to: New York
    Replied: 8/11/2011
    Dan Shay Law
    Dan Shay Law | Daniel Shay
    No, not without permission from the court. File a Motion to Sell Property of the Estate or wait till the case is closed.
    Answer Applies to: California
    Replied: 8/11/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    Yes, if Court approves and CH. 7 Trustee has no opposition.
    Answer Applies to: California
    Replied: 8/11/2011
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    No. The trustee owns your house until he abandons it when he closes your case unless you file a motion to compel his abandonment.
    Answer Applies to: Michigan
    Replied: 8/11/2011
    The Law Offices of Stephen C. Sutton
    The Law Offices of Stephen C. Sutton | Robert S. Sutton
    That depends on how far along you are in the filing process. If you have not filed yet but are contemplating filing you can either allow the house to short sell or surrender the house through the bankruptcy. If you do decide to short sell you may still be on the hook for the deficiency, which you can cure through bankruptcy.
    Answer Applies to: Colorado
    Replied: 8/11/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    In order to sell a house during a Chapter 7 bankruptcy, you must get the Trustee to abandon the property or the Court to approve the sale. This is not difficult for your attorney to arrange in most cases. Without the Trustee's involvement, you cannot sell any property during your Chapter 7 case.
    Answer Applies to: Colorado
    Replied: 8/11/2011
    Law Offices of Steven A. Wolvek
    Law Offices of Steven A. Wolvek | Steven A. Wolvek
    Yes but only after you get the Chapter 7 Trustee to abandon the asset.
    Answer Applies to: California
    Replied: 8/11/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Yes.
    Answer Applies to: California
    Replied: 8/11/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Once a Chapter 7 case is filed, you are no longer the legal owner of the house. The Chapter 7 trustee is. Therefore, you cannot agree to sell the house or sign any documents transferring title. You need to get the Chapter 7 trustee to agree to the sale or have the trustee abandon the house back to you. As a starting point, the trustee needs to be satisfied by documents that the value of the house is less than the existing liens and the house is of no benefit to the bankruptcy estate.
    Answer Applies to: California
    Replied: 8/11/2011
    Ross Smith, Attorney at Law
    Ross Smith, Attorney at Law | Charles Ross Smith III
    Yes. You can sell a house that is in a Chapter 7 Bankruptcy. But you must ask the Trustee to "abandon" the house before it is sold. An attorney is real useful for work like that.
    Answer Applies to: Ohio
    Replied: 8/11/2011
    Lewis Adams and Associates
    Lewis Adams and Associates | Lewis P. Adams
    All property, including the house, is property of the estate after filing for Chapter 7. Until the trustee makes a decision as to whether it is an asset that has value for the creditors, it cannot be sold. However, if there is no equity, you can made a request to have the trustee abandon the property to allow you to sell the home.
    Answer Applies to: Utah
    Replied: 8/11/2011
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