How to Sell Your House During Bankruptcy in Washington

When you file for bankruptcy while owning a home, that property becomes part of your bankruptcy estate—essentially all assets you own. In October 2022, chapter 13 bankruptcy filings increased by twenty-seven percent compared to the previous year. Total bankruptcies across all chapters rose by seven percent, directly mirroring the seven percent inflation increase. Many homeowners find themselves overwhelmed by mounting debt. As financial pressures emerge from circumstances beyond their control, affecting their ability to meet obligations to creditors, bankruptcy often becomes their only path to stop a foreclosure on their primary residence.

Homeowners with secured and unsecured debts under $2,750,000 can qualify for chapter 13 bankruptcy. Chapter 7, however, involves a liquidation process where the trustee sells your assets to satisfy debts based on your income, total debt, and ability to repay. At Sound Home Buyer, we frequently work with homeowners who want to sell their properties to address their financial challenges but aren’t sure if this is possible—or even allowed—while bankruptcy proceedings are active.

While the specific rules vary depending on your bankruptcy type, and many factors influence the final outcome, the short answer for most homeowners is yes, you can sell. Continue reading as we explain how to sell your house during bankruptcy in Washington. As local experts who specialize in complex situations, we’ve helped many homeowners navigate this process with dignity and clarity. Please note that this article provides information only and should not be considered financial or legal advice.

Court Permission

When selling your house during bankruptcy in Washington, you’ll need to file a motion with the court requesting permission to sell your property. This detailed motion should include your proposed selling price, plans for the proceeds, and names of creditors with liens on the property. This transparent approach allows creditors and trustees to voice any concerns, while the court makes the final determination about how funds will be distributed.

Contingency

For traditional sales when selling during bankruptcy in Washington, you must include a contingency clause stating the sale depends on bankruptcy court approval. Under Chapter 7, be aware that the trustee may choose to sell the house themselves if your home has substantial equity exceeding your bankruptcy exemption. In this scenario, the trustee uses the proceeds to pay secured debts like your mortgage, provides you with your exempted amount, then distributes remaining funds to unsecured creditors proportionally.

Proceeds

Concerned about what happens to your home equity when selling your house during bankruptcy in Washington? We understand this can be confusing. While your homestead exemption protects some of your equity, any remaining funds typically go toward paying off unsecured creditors or covering bankruptcy-related expenses. We can walk you through this process with clear, straightforward guidance – no jargon, no confusion.

Planned Payments

Facing Chapter 13 bankruptcy while trying to sell your home in Washington? We understand this challenging situation requires modifying your existing repayment plan. Here’s the silver lining – your home sale proceeds might actually help you complete your bankruptcy plan earlier than expected by fulfilling your outstanding obligations. At Sound Home Buyer, we’ve guided many homeowners through this exact process with the honest, straightforward advice that’s at the core of everything we do.

Itemized Payoff Statement

When selling your house during bankruptcy in Washington, protect yourself by requesting comprehensive, itemized payoff statements from all parties involved – this reflects Sound Home Buyer’s commitment to complete transparency and honest, straightforward dealings with no games or surprises throughout your home sale process.

Sound Home Buyer

Don’t delay! With competition driven by low housing inventory and potential interest rate increases ahead, now is the perfect time to maximize your home’s value. The most straightforward way to sell your house during bankruptcy in Washington is working directly with the local, trusted experts at Sound Home Buyer. We believe in complete honesty throughout every step because we want you to make the best choice for your unique situation. A Sound Home Buyer team member will clearly outline all potential costs and profits from both a traditional agent listing versus our fair cash offer. We take this approach because we’re your neighbors here in Washington, deeply committed to our local community, and want to build relationships based on trust that last well beyond closing.

The certified professionals at Sound Home Buyer have helped many homeowners navigate bankruptcy sales and can provide the straightforward solution you need—offering a guaranteed closing date with no commissions, no closing costs, and no surprises. If you’d prefer to avoid the work and out-of-pocket expenses of preparing your house for the Washington real estate market, our direct cash purchase option is your answer. Our team never charges commissions, and there are absolutely no hidden fees. You can breathe easier knowing you won’t even need to deal with the stress of showings or repairs when you work with Sound Home Buyer. For a compassionate, hassle-free sale of your home during bankruptcy, we’ll buy your house directly, as-is, for cash—providing the speed, certainty, and flexibility you desperately need during this challenging transition. Call Sound Home Buyer at (360) 317-2777.