Sell a House After Filing Chapter 7 Bankruptcy in Idaho

Sell a House After Filing Chapter 7 Bankruptcy in Idaho

Bills piling up and calls from creditors can be overwhelming. Sometimes the only way out is to file bankruptcy. But how does that work if you’d like to sell your Idaho house? 

If you’ve filed Chapter 7 bankruptcy but would like to sell your home, there are a couple of things you should know, including if it’s even possible. Below we’ll explain what Chapter 7 bankruptcy is, if you can sell a house after filing bankruptcy, and how to sell your home in Idaho. 

So let’s get started! 

Chapter 7 Bankruptcy Petition with Glasses and Pen

What is Chapter 7 Bankruptcy

Chapter 7 bankruptcy, known as the liquidation, or straight bankruptcy, is a chapter of bankruptcy that can clear away many types of unsecured debts. If you’re past due on your bills and don’t have the financial means to afford monthly payments and living expenses, filing Chapter 7 bankruptcy could be the last resort to reset your financial situation. However, you may have to give up some of your possessions; and it will have a long-lasting (like 7-years long) impact on your creditworthiness. Basically, this chapter of bankruptcy appoints a trustee to take your assets and uses them to pay off your debts. 

However, you are allowed to exempt (keep) certain things, including some of the equity in your home. Specifically in Idaho, the homestead exemption allows a filer to protect up to $175,000 in equity in a home or mobile home. This amount can’t be doubled by married filers. 

So, for example, if your property is worth the average home value in Idaho, $403,000, and you still owe the lender $375,000, you have $28,000 worth of equity in the home. Since Idaho’s homestead exemption is $175,000, then the trustee can’t take your home. But if you have $200,000 worth of equity in the home, then the trustee could take and sell your house, pay off your mortgage, give you the $175,000 exempt amount and use any remaining funds to repay other creditors. 

You have the option though to sell a house with negative equity to home buyers. Keep this option always open as they buy fast and in cash. This way, you have a sure fallback when everything crumbles.

Can You Sell a House After Filing for Chapter 7 Bankruptcy in Idaho

After you file for Chapter 7 bankruptcy, your house and other possessions become part of the case. Although creditors can’t foreclose on your home because it is shielded by bankruptcy protection, you can’t sell your house without specific permission from the Idaho bankruptcy court. But, the trustee can ask the court for permission to sell your Idaho house to satisfy your debts. 

However, you can obtain court approval, too, by filing a Motion to Sell Real Property with the bankruptcy court. Detailed information, including the selling price and the creditors’ names with liens on the property, must appear in the formal motion. You’ll also need to provide the court detailed information about what you want to do with the proceeds following the sale. 

So to answer the question, can you sell a house after filing for Chapter 7 bankruptcy in Idaho? Yes, you can, with approval by the Idaho court. 

How to Sell a House After Filing for Chapter 7 Bankruptcy

If you’d like to figure out how to sell a house after filing for Chapter 7 bankruptcy, you’ll start by getting court approval to sell your home. Then, once you get the green light by the court that you can sell your Idaho house, you’ll need to figure out a selling strategy. 

You can list with a real estate agent, sell by owner or look into creative ways to sell your house. One such option would be to sell to one of the companies that buy houses in Boise

From there, you’ll want to start getting your house ready to put on the market. This includes making repairs, touching up paint, cleaning carpets, decluttering attics and the garage, and doing yard work. 

After you’ve completed that, your house will be ready to go on the market. Currently, the average days on the market for an Idaho house to receive an offer is 43-days, plus the typical 35-day closing period. So total, you’re looking at 78 days to sell a house. Of course, factors like the condition of your home, age, location, and size all play a factor in its desirability and could affect your days on the market. 

If that timeframe isn’t ideal, you can always “Sell my house fast Nampa,” Boise, Eagle, or Garden City by selling to a cash home buyer like Gem State Cash Offer. 

If you were hoping to sell your house quickly, selling to Gem State Cash Offer could provide several benefits. First, they buy houses in as-is condition, so you wouldn’t have to worry about getting your home ready to sell or make costly repairs. Second, you wouldn’t have to wait around for an offer either; they can make you a cash offer within 24-hours and can close on your house in as little as 7-days. Lastly, they don’t charge expensive realtor commissions, which is a savings of several thousand dollars. 

So, if you’re looking for a fast way to sell your house to avoid bankruptcy or get in a better financial position, working with a “Buy my house Idaho” company would be ideal. Just make sure to research the home buyer you’d like to work with to avoid house buying scams

Bankruptcy and Real Estate Laws in Idaho

The bankruptcy process falls under federal law when it comes to Idaho’s bankruptcy and real estate laws. However, Idaho laws do come into play significantly, especially when determining the property you can keep in your bankruptcy case. Certain things are exempt and non-exempt, as mentioned earlier with the homestead exemption.

If you have questions about filing bankruptcy, the process, and what exemptions would apply to you, it’s always wise to seek counsel from a bankruptcy attorney.

Filing for Bankruptcy and Selling Your Home in Idaho

Filing for Bankruptcy and Selling Your Home in Idaho

If you’re considering filing for bankruptcy and selling your house, these are the three times to list your home during the process. 

Option 1: Sell your House Before Filing for Chapter 7 Bankruptcy

If you haven’t filed for bankruptcy yet, selling your home before you file may help solve your debt woes. Bankruptcy should be considered as a last resort, so if you can sell your house and pay off the debt that way, it would be wise to do so. 

Option 2: Sell your Home After Filing Chapter 7 Bankruptcy

You can try to sell your home while in the midst of bankruptcy proceedings, but you’ll have to get court approval as mentioned above and provide detailed information about how you plan to spend the proceeds. However, your trustee can also request the same thing. 

Option 3: Sell your Property Once the Bankruptcy is Finalized

The entire Chapter 7 process typically takes about four to six months for the court to discharge your remaining debts. Once it’s officially closed, you can sell your house. You’ll just want to run it by your bankruptcy attorney to ensure that you’re cleared to do so. Bear in mind if you’re behind on your payments, your creditors can still foreclose on your home once you complete the bankruptcy process, so you’ll want to figure out a way to sell quickly. 

Final Takeaways

Going through Chapter 7 bankruptcy can be a stressful undertaking and it might even be expensive. While going through the process, if you’re hoping to sell your house, it’s beneficial to work with real estate professionals that understand what you’re going through. Gem State Cash Offer has been able to work with sellers going through the bankruptcy process, successfully sell their homes, and they can help you too. Contact Gem State Cash Offer today to learn more about their company or how selling your house for cash works


Kevin is a real estate investor dedicated to helping homeowners sell their properties quickly and without the stress and hassle of a traditional listing.

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