Can You Sell Your House After Filing Chapter 7 Bankruptcy In SF Bay Area?

If you’re thinking about declaring bankruptcy to clear your debts, you have to know one thing: you are not alone.

It’s a tough decision, but it can offer the debt relief you need to get back on track financially.

There are three types of bankruptcy filings, all under the Bankruptcy code: chapter 7, which involves selling assets to pay off debts; Chapter 11, which is for struggling businesses; and Chapter 13, which involves setting up a repayment plan.

In this guide, we’ll explain your options for filing Chapter 7 bankruptcy and how to minimize the impact as much as possible

Chapter 7, also known as liquidation or straight bankruptcy, is a legal process to clear your debts. When your debts are discharged, you’re no longer required to pay most of them. But, there are some exceptions: child support, student loans, federal government tax liens, income taxes, and criminal fines.

In bankruptcy, all your belongings become part of the bankruptcy estate unless you’re able to keep some through an exemption. These belongings are then sold, and the money is given to your creditors.

What is Chapter 7 Bankruptcy In SF Bay Area

While this may sound scary, you will not be left penniless. The goal of a bankruptcy case is to give you a fresh start, and that means you get to keep an inexpensive car, your clothing, some furniture, and if you’re lucky, even your home.

Prior to considering Chapter 7 bankruptcy, it’s crucial to thoroughly assess your alternatives and take the appropriate measures to safeguard ownership of your real estate.

Meeting with a bankruptcy lawyer could prove beneficial in assessing your liabilities, appraising your property, and determining the optimal strategy moving forward.

The Chapter 7 Bankruptcy Process In SF Bay Area

You need to know about exempt and nonexempt property details. The homestead exemption varies by state, but there’s a federal one at $27,900.

Some states let debtors pick between federal and state rates. If, say, you have $85,000 equity, you can see if the state gives more.

In New York, the claim ranges from $75,000-$150,000. Couples can claim double, so up to $300,000 is protected from liquidation.

Whatever the case, you must make sure that an exemption protects your home equity.

Should You Get A Bankruptcy Attorney?

This is why it’s smart to hire a seasoned bankruptcy lawyer. If you’ve got a lot of value tied up, the cost of consulting is tiny compared to what you could save.

A bankruptcy lawyer who knows the local courts can assist you in holding onto your property. Establishing a strong attorney-client bond is key when going through bankruptcy proceedings.

Should You Get A Bankruptcy Attorney In SF Bay Area

After filing for bankruptcy, a legal order stops any actions against your properties. During this period, your debt collectors are unable to ask for payments.

Then, a trustee is chosen by the court to manage your assets on behalf of your creditors. This trustee oversees all of your properties that haven’t been exempted from the bankruptcy process.

The nonexempt property includes, but is not limited to:

  • Vacation home
  • Second car
  • Collections – watches, paintings, wine, to name a few
  • Inherited valuable items such as jewelry
  • Cash, bank accounts, stocks, bonds, and other investments

But, if your property’s worth doesn’t exceed your exemption, mortgage, sale expenses, and the trustee’s fee altogether, the trustee won’t sell it. That implies your equity isn’t sufficient to settle your debts, and you can retain it.

If you’re fortunate enough to reside in a state offering full homestead exemption, you can sell your current home to buy a new one outright.

But typically, the exemption covers only a down payment… If your credit score is wrecked, getting a mortgage could be tough.

Yes, declaring bankruptcy will hurt your credit score. It will be in your credit history for up to 10 years, so it will take time and effort for you to recover.

It may hinder your eligibility for a regular home loan for a similar duration. However, you may meet the requirements for an FHA mortgage, provided you’ve rebuilt your credit for two years post-bankruptcy.

Although things may look bleak, all hope is not lost, as you will see below.


Once the trustee releases a “No distribution report” and the bankruptcy court closes your case, you can immediately sell your house. In doing so, the bankruptcy trustee would have no claim over the proceeds of the sale, and you can do with it as you wish.

If you sell your home before bankruptcy finalizes, you must use the money from the sale to buy another home, or the trustee may take it and give it to those you owe money to.

Also, selling your house before filing for bankruptcy could look like fraud. If your property is protected, there won’t be any issues. But if you really need the money for important things, that’s different.

After your bankruptcy is finished and you keep owning your home, you still gotta pay all the bills. That means the mortgage you owe after you file for bankruptcy. If you don’t, the mortgage company may start trying to take your house. But it’s gonna cost them a lot, so you may get a chance to sell the place on your own.

There are two ways you could go about this:

Sell your parent’s house as-is to a real estate investor in SF Bay Area

If you don’t have money to keep up with the mortgage payments, then you can consider a short sale.

A short sale happens when you sell your house for less than what you owe, and the lender forgives the rest instead of taking back the property. This means you don’t make any money from the sale, but you avoid the trouble of foreclosure. If you don’t like this choice and want to explore ways to make a profit from your real estate, there are other options you can consider…

In simple terms, the process is like a usual sale. You can choose to collaborate with a real estate agent and list it on the market, handle the sale yourself through For Sale by Owner (FSBO), or opt to sell it to a real estate investor for instant cash.

It’s important to sell your house quickly because you’ll have to keep up with mortgage payments while your property is on the market. The quickest way to sell is by finding a buyer who can pay in cash.

Some cash buyers specialize in assisting homeowners facing financial difficulties. They cover the mortgage balance and other selling expenses, and you won’t have to worry about paying the realtor’s fees when working with them.

This would allow you to walk away from financial distress with cash in hand to start anew elsewhere.


Selling your house after filing for Chapter 7 bankruptcy in today’s market is not impossible (especially at the right selling price).

Though there are hurdles, knowing relevant laws can guide you. Consulting a bankruptcy lawyer and mortgage expert post-filing can clarify matters.

Post-bankruptcy, many homeowners quickly sell troublesome properties to regain stability. If you aim for this, you’re in the right place. At We Buy Houses in SF Bay Area, we promptly offer fair cash for your house, no strings attached.

We buy homes as-is, including financially strained ones, easing the burden of bankruptcy proceedings.

Start by filling out the form below, or call (408) 557-7554 with any questions. We’re here to assist!

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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. 🙂

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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.

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