Can I Sell House While In Bankruptcy?

Under bankruptcy law, filing for a bankruptcy can temporarily delay a foreclosure for your home. The lender is required to file a motion asking for the foreclosure to continue proceeding. If the homeowner is found to be simply behind in their mortgage payments and needs debt relief to catch up, he might be able to save his home through bankruptcy. However, if the owner cannot make payments or if the equity in the house can be used to pay off other creditors, he could lose the property.

Filing for Chapter 13 bankruptcy is only a temporary fix, unless it can get rid of all unsecured debt to leave them plenty of money to pay the regular monthly mortgage. If Chapter 13 fails, there is a time or opportunity for the seller to go back to the lender or court and request a short sale.