Are you a Portland homeowner facing bankruptcy? Wondering if you can sell your home before, during, or after the proceedings?

In some cases, the answer is yes!

Bankruptcy can be very tricky — and its implications for your property will depend on if you have Chapter 7 or Chapter 13 case. We recommend reviewing Oregon bankruptcy law as a starting point. Then, contact your attorney to discuss the issue. Your lawyer will consider your unique situation and advise you on the best path forward for you and your family.

In the meantime, review some helpful information and resources below.


You may also be interested in…


Learn how to stop your home from entering foreclosure (and avoid the consequences of a foreclosure on your record) by selling it quickly and paying your mortgage lender everything you owe, including penalties and back payments.


Selling a house before bankruptcy

If you’re in a tough financial situation, selling your house quickly for cash can often help you get back on your feet. However, if you know you’re going to file for bankruptcy, regardless of whether or not you sell the house, you should tread carefully.

Though selling or transferring certain certain property before filing for bankruptcy is allowed in some cases, it can also put you at risk. If handled incorrectly (especially as a way to avoid paying creditors) you could face severe consequences.

If you want to consider selling your house before bankruptcy as an option, make sure to do your homework and partner with an attorney who can advise you on how to move through the process legally.


Selling during bankruptcy


A common misconception is that you’ll automatically lose your home when you file for bankruptcy. In fact, if your home is worth more than what you owe your mortgage lender, the Oregon homestead exemption can help protect your home.

In Oregon, the homestead exemptions allow you to protect up to $40,000 of your home equity ($50,000 for married couples). What does this mean?

  • For Chapter 7 bankruptcy, the trustee can’t sell your home if the homestead exemption covers all of the equity.
  • In Chapter 13 bankruptcy, you can keep your home, but you’ll have to reimburse your creditors an amount equal to the portion that isn’t protected by the exemption

But even if you’re allowed to keep your home, what happens if you need to move, downsize, sell your home for some other reason? You may still be able to sell your home.

You’ll need to start by gaining permission to sell. You’ll likely file a Motion to Sell Real Property with the bankruptcy court. All the particulars of the sale and your situation must be included in the formal motion, including:

  • The selling price
  • Names of creditors with liens on the property
  • Information on what you want to do with the proceeds of the sale

As always, make sure to involve your lawyer in this process to ensure you’re crossing all the “t’s”, dotting the “i’s”, and staying on track, legally.


How to sell your home after bankruptcy


Once the bankruptcy case is closed, you’re free to sell any remaining assets you still own — including your home. In fact, if your mortgage is (still) in default, selling your home quickly is often the best option to avoid foreclosure.

If you are able to find a buyer who can cover the mortgage balance, the sale funds can be used to eliminate this last chunk of debt you walked out of your bankruptcy with. And if you hold equity in the home, you may even turn a profit!

Often, many people in this situation choose to sell their home for cash. There are many reasons to sell your home for cash, but when you’re dealing with the fallout of bankruptcy, the fact that the entire process can be completed in as little as 2-3 days (and with no real estate agent fees or commissions) is a huge benefit.

Plus, depending on the buyer you work with, you may even be able to work out an agreement to stay in the home until you can find alternative living arrangements.


Has your lawyer given you the go-ahead to sell? We can help


If you’re interested in selling your home due to bankruptcy and your attorney has advised you that selling is a viable option, Columbia Redevelopment is here to help.

We’ve been buying houses for cash in the Portland area since 2008 and take a proven 4-step approach:

  • Step 1: After you’ve contacted us, we’ll listen to your situation and talk to you to learn more about your property.
  • Step 2: After scheduling a time that works for you, we’ll come to visit your property, tour your home, and assess its potential.
  • Step 3: Within 24 hours, we’ll give you an all-cash offer for your home. We’re also happy to provide any necessary information for the bankruptcy court, your lender, or trustee. If you accept, we’ll draft all necessary sales documents. After the paperwork is completed, we’ll deposit the contract and $10,000 earnest money into your account.
  • Step 4: Finally, together we’ll choose your closing date. This can be as soon as 2-3 days. On your closing date, we’ll transfer the sales proceeds to your account.

We understand that dealing with bankruptcy can take a toll on you and your family. We’ll do our best to make this stressful time a bit more manageable. You’ll walk away with the best price for your home and without the need to do repairs, go through inspections, or pay commission fees.

Contact us today at (503) 406-9874 and let us know how we can help! Or read our FAQs to learn more.