Can I Sell My House While in Chapter 13 Bankruptcy In SF Bay Area

Homeowners undergoing Chapter 13 bankruptcy get an opportunity to sort out their finances and clear debts over three to five years. While this legal process aims to shield debtors, it can complicate home sales.

Chapter 13 bankruptcy doesn’t block homeowners from selling their houses. Yet, the sale needs approval from the Bankruptcy court and creditors. The sale funds are then distributed to creditors by the bankruptcy trustee. Essentially, the homeowner won’t make a profit, but debts will be settled, and bankruptcy resolved.

Can I Sell My House While in Chapter 13 Bankruptcy In SF Bay Area

Navigating a home sale while in Chapter 13 bankruptcy can be immensely tricky. If you need further guidance, this blog has you covered!

As per the United States Courts, Chapter 13 bankruptcy, also known as the “wage earner’s plan,” enables homeowners with steady income to develop a repayment plan for their mortgage lenders over three to five years.

A key benefit of opting for Chapter 13 bankruptcy is the ability to halt foreclosure proceedings on a property. Essentially, creditors are barred from pursuing or resuming collection efforts against the debtor throughout this three to five-year period.

What is Chapter 13 Bankruptcy In SF Bay Area

To qualify for Chapter 13 relief under the bankruptcy code, an individual must either be a wage earner or self-employed. Their secured debts must not exceed $1,395,875, and their unsecured debts should be below $465,275.

Yes, you can sell your house while in Chapter 13 bankruptcy. But as established, you would need the Bankruptcy court’s permission.

You can’t put up the property for sale or close a deal with a cash buyer without informing the mortgage lender and getting their approval. And if the property’s value isn’t protected from bankruptcy, you won’t receive any proceeds from the sale—all the money will go towards clearing your debts.

Can I Sell My House While in Chapter 13 Bankruptcy In SF Bay Area

Since a house sale while in Chapter 13 bankruptcy is extra challenging, you would benefit from hiring a bankruptcy attorney for guidance. Many will offer a free consultation.


By now, you must have already weighed your chances of selling your house while in Chapter 13. But to fully understand what you have to go through, here’s an overview of the whole process— from approval to being discharged of your debt.

What Happens if I Sell My House During Chapter 13 Bankruptcy In SF Bay Area

Firstly, when you’re selling a house and you’ve filed for bankruptcy, it’s crucial to inform your bankruptcy lawyer because all your assets are being managed by a trustee.

Your bankruptcy lawyer is the expert in guiding a home sale during Chapter 13 proceedings, and they’re focused on protecting your interests.

Building a strong relationship with your lawyer is key. They’ll take care of the paperwork and make sure the necessary motions are filed for the sale to go through smoothly.

Once you have informed your bankruptcy attorney regarding your plans, they’ll help you file a motion to sell with the Bankruptcy Court and the trustee to get sale permission. 

A motion to sell to get court approval usually includes the following:

  • The asking price of the bankruptcy estate
  • An appraisal to identify the value of the property
  • How the proceeds of the house sale will be disbursed to the creditors

When the bankruptcy court gets the request to sell, they’ll tell your lender/s that you’ve chosen to list the property. This is important because of the agreement you made with your lenders. Usually, lenders have 14 days to say if they disagree.

There are two ways this can go: either the mortgage holder doesn’t disagree, so you can sell after court approval, or they do, and you have to stick to the repayment plan you agreed on.

4. File a Statement of Sale with the Bankruptcy Trustee

If your motion is approved and you have successfully closed the sale with the help of a real estate agent or real estate broker, filing a statement of sale is necessary. This statement should include the following:

  • The home’s final sale price
  • Deductions or payments related to closing (This isn’t necessary if you sold to a cash buyer who covered closing costs.)
  • The amount that will be turned over to the trustee to pay off the mortgage
  • Other remaining proceeds of the home sale

Again, you would not receive money from the house sale since all your assets are being managed by the trustee. What you’ll get from the sale will be used to pay your debts.

File a Statement of Sale with the Bankruptcy Trustee

Once the sale money goes to the bankruptcy trustee, it gets divided among your creditors.

If there’s sufficient cash to cover your mortgage or other debts like alimony or business obligations, the trustee can release you from bankruptcy. The judge then gives final approval.

If you’re not sure about the process, think about talking to a bankruptcy lawyer. You may get a free consultation if you’re fortunate.


No. A debt relief agency or debt settlement company doesn’t play a role in selling a house while in a Chapter 13 bankruptcy case.

The main job of a debt relief firm is to talk with your loaners or those you owe money to about what you owe. They don’t directly affect selling. Yet, if they can cut your debt, you may not need to sell your place.

Keep in mind, though, that dealing with a debt relief firm is risky. They also ask for high fees.

Does a Debt Relief Agency Play a Role in Selling a House While in Chapter 13 In SF Bay Area

Selling your house through a traditional real estate agent can fetch higher offers, but opting for a cash buyer can be advantageous if you seek a swift sale and lack funds for repairs or upgrades.

Bear in mind, putting your home on the market entails staging and marketing expenses, potentially exacerbating financial strain—best avoided amidst bankruptcy concerns.

Cash buyers acquire properties in their current condition, even if the owner is in Chapter 13 bankruptcy. They act swiftly and ensure a straightforward transaction. Additionally, they handle closing costs!

Selling a house during Chapter 13 bankruptcy isn’t easy, even with a bankruptcy lawyer’s help. Many approvals are needed, and the homeowner may not make any money. But the good news is that selling the home can pay off the owner’s debts.

If you want to sell your house quickly during Chapter 13 bankruptcy, reach out to us at We Buy Houses in SF Bay Area. Our process is straightforward, and we don’t have any fees!

Complete our form or call us at (408) 557-7554 to find out more about selling your house during Chapter 13 in SF Bay Area.

SF Bay Area Resources

Can I Sell My House Quickly If My Spouse Is In Jail In SF Bay Area?Lender Required Repairs on a Home In SF Bay Area
Selling House for Job Relocation In SF Bay AreaInheriting a House With Siblings In SF Bay Area
Can I Sell My House In SF Bay Area If I’m Behind on Payments?How to Sell Rental Property In SF Bay Area
Selling a House With a Lien In SF Bay AreaHow to Sell a House by Owner In SF Bay Area
Selling Parent’s House Before Death In SF Bay AreaHow to Sell a Hoarder House In SF Bay Area
Title Problems at Closing In SF Bay AreaCan I Sell My House While in Chapter 13 Bankruptcy In SF Bay Area?
How to Sell a Fixer Upper House Fast In SF Bay AreaSelling a House with Foundation Issues In SF Bay Area
Should I Sell My House and Rent In SF Bay AreaCan You Sell Your House After Filing Chapter 7 Bankruptcy In SF Bay Area?
Selling a House that Needs Repairs In SF Bay AreaWhat Does it Mean When a House Sells for $1 In SF Bay Area?
Who Has to Leave the House in a Divorce In SF Bay Area?Selling a House with Water Damage In SF Bay Area
Short Sale vs Foreclosure In SF Bay AreaSelling a House with Code Violations In SF Bay Area
Selling Distressed Property In SF Bay AreaHow Much Equity Should I Have Before Selling My Home In SF Bay Area?
Selling a House with Unpermitted Work In SF Bay AreaCan you Sell a House with Mold In SF Bay Area?
Selling a House with Storm Damage In SF Bay AreaCan you Sell a House with Asbestos In SF Bay Area?
Selling a House to an Investor In SF Bay AreaCan You Sell a House with a Mortgage In SF Bay Area?
Selling a House in Poor Condition In SF Bay AreaCan You Sell a Condemned House In SF Bay Area?
Sell A House Before 2 Years In SF Bay AreaCan I Sell My House Below Market Value In SF Bay Area?
Lost My Job, Can’t Pay Mortgage In SF Bay AreaCan I Sell My House and Still Live in It in SF Bay Area?
How to Sell Your House in 7 Days In SF Bay AreaCan You Sell a House in Foreclosure In SF Bay Area?
How to Sell Your House in 5 Days In SF Bay AreaSelling Inherited Property In SF Bay Area
How to Get Rid of Bad Tenants In SF Bay AreaHow to Sell Rental Property with Tenants In It In SF Bay Area
How Much Do You Lose Selling a House As-Is In SF Bay Area?Selling A Fire Damaged House In SF Bay Area
Expired Listing: Can I Sell My House In SF Bay Area?Selling a House in Probate In SF Bay Area
Divorce Appraisals: What to Look for in a Divorce Appraiser In SF Bay AreaCan You Sell Your Home If You Have a HELOC In SF Bay Area?
Can You Sell a House Before Probate In SF Bay Area?Insurance Crisis In SF Bay Area
Can an Executor Change a Will In SF Bay Area?How Long Does it Take to Relocate for a Job In SF Bay Area
Benefits of Selling a House for Cash In SF Bay AreaFoundation Inspection In SF Bay Area
Selling My House and Moving to Another StateSelling a House During Divorce In SF Bay Area
Selling a House with Termite Damage In SF Bay AreaCan I Sell My House with a Failed Septic System in SF Bay Area?
Selling a House With an Old Roof In SF Bay AreaHow to Get Rid of Squatters In SF Bay Area

The Easiest Way To Sell Your House Fast In SF Bay Area

You’re in the driver’s seat when you accept our cash offer for your house. We make the process simple, fast, and easy to follow when working with us. You have no obligation to accept our cash offer for your home when contacting us for a fair cash offer for your home. No matter the reason you want to sell your house, we want to buy your home as is. Remember that you get many benefits that include no real estate agent commissions, no cleaning, no improvements, and no stress. Our cash offer for your as-is house assures you of fast cash payment at closing with a reputable Title company. You can count on our company to give you a fair cash offer for your home! If you’re still thinking, “I need to sell my house fast”, calling us could be your best decision all day. 🙂

  • This field is for validation purposes and should be left unchanged.


Gagan Saini

Author: Saini

My name is Saini, and I founded the We Buy Houses in SF Bay Area team with years of experience in the real estate industry. I have assisted numerous sellers in selling their homes quickly, “AS-IS”, and for a fair price.

He’s been featured in multiple publications including Yahoo Finance, GoBankingRates, LegalZoom, The Mortgage Report, Apartment Therapy, US News and World Report, and SuperMoney among others.

Get More Info On Options To Sell Your Home...

Selling a property in today's market can be confusing. Connect with us or submit your info below and we'll help guide you through your options.

Get An Offer Today, Sell In A Matter Of Days

  • This field is for validation purposes and should be left unchanged.