How to Sell Your House During Bankruptcy in Florida

When you own a home during bankruptcy filing, it becomes part of your bankruptcy estate—all property and assets under your ownership. 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 Florida Panhandle homeowners find themselves overwhelmed by mounting debt. As financial challenges beyond their control impact their ability to pay creditors, bankruptcy often becomes their only option, which can effectively halt a foreclosure on their primary residence.

Homeowners with secured and unsecured debts under $2,750,000 typically qualify for chapter 13 bankruptcy. In contrast, chapter 7 involves liquidation, where the trustee sells your assets to satisfy debts based on your income, total debt, and repayment capacity. Many Bay County homeowners want to sell their properties to alleviate financial pressure but are uncertain whether this is possible during active bankruptcy proceedings. As a local, family-owned company serving Gulf Coast communities, we understand these concerns.

While specific rules vary depending on your bankruptcy type and numerous factors affect the final determination, the short answer for most Panhandle homeowners is yes, you can sell. Continue reading as we explore how to sell your house during bankruptcy in Florida. Please note that this article provides informational content only, not financial or legal advice. Our team at Panhandle Real Estate Investments is committed to offering transparent, honest solutions for homeowners facing difficult situations.

Before selling your house during bankruptcy, you’ll need court approval and trustee involvement. In Chapter 13 cases, the court will want to ensure the sale aligns with your repayment plan and that any proceeds are properly distributed to creditors. You’ll typically need to file a motion to sell with the court, outlining the terms and buyer details. In Chapter 7 cases, the trustee may decide to sell the home if there’s significant equity after exempting allowable amounts. However, Florida’s generous homestead exemption often protects a primary residence from liquidation, especially if you’ve lived there for at least 1,215 days prior to filing.

Importantly, timing and communication are key. Selling a home without notifying your trustee or getting court approval can jeopardize your case. That’s why it’s crucial to work with an experienced real estate buyer and consult a bankruptcy attorney. At Panhandle Real Estate Investments, we’ve worked with homeowners and legal professionals throughout the Gulf Coast to create seamless transactions that satisfy court conditions and help clients move forward.

Remember: every case is different. With the right team and strategy, you can often sell your home and regain control of your financial future even while in bankruptcy.

Court Permission

To sell your house during bankruptcy in Florida, you’ll need to file a motion with the court requesting leave to sell real property. This motion should include your asking price, plans for the proceeds, and names of creditors with liens on the property. This formal request allows creditors and trustees to raise objections, with the court ultimately deciding how funds will be distributed.

Contingency

When using a traditional sale approach to sell your house during bankruptcy in Florida, you must include a contingency clause stating the sale depends on receiving bankruptcy court permission. Under chapter 7, however, the trustee may decide to sell the house themselves if your property has significant unprotected equity exceeding your bankruptcy exemption. The trustee would then use these funds to pay off secured debts like your mortgage, provide you with your exempted amount, and distribute any remaining funds proportionally among unsecured creditors.

Proceeds

You might wonder what happens to proceeds after satisfying your mortgage when selling your house during bankruptcy in Florida. Much depends on your homestead exemption in Florida. However, remaining proceeds typically go toward paying unsecured creditors or covering bankruptcy case expenses rather than returning to you directly.

Planned Payments

If you’re under chapter 13 bankruptcy and sell your house in Florida, you’ll need to modify your payment plan. Depending on your sale price, you might complete your bankruptcy plan earlier than expected since proceeds go directly toward your bankruptcy obligations.

Itemized Payoff Statement

To avoid unexpected costs after selling your house during bankruptcy in Florida, always request a detailed, itemized payoff statement that accounts for all potential fees and obligations.

Panhandle Real Estate Investments

Don’t delay! With housing competition driven by low inventory and interest rates likely to rise, now is the ideal time to sell your property. The most straightforward way to sell your house during bankruptcy in Florida is through a direct sale to the local investors at Panhandle Real Estate Investments. As a family-owned business serving the Panhandle, Panhandle Real Estate Investments believes in complete transparency throughout the process because we want you to choose what works best for your situation. Our team will clearly outline your potential profits from a traditional listing versus our fair cash offer. At Panhandle Real Estate Investments, we do this because we’re your neighbors here in Florida—we genuinely care about our Gulf Coast community and the people in it, ensuring you feel good about working with us long after closing.

The experienced team at Panhandle Real Estate Investments has helped many Panhandle homeowners through bankruptcy and offers the solution you need—providing a guaranteed closing date with no commissions or closing costs, and no unpleasant surprises. If you want to avoid the stress of preparing your house for the Florida real estate market, a direct sale to Panhandle Real Estate Investments is your answer. Our cash investors never charge commissions and have no hidden fees. You can relax knowing you won’t even need to host showings when you sell directly to Panhandle Real Estate Investments. For a hassle-free sale during bankruptcy: we’ll buy your house directly, as-is, for cash—treating you with the dignity and respect you deserve. Call Panhandle Real Estate Investments at (850) 778-2212.