Q: Can you short sale a home during Chpt 7 Bankruptcy?
A: Yes, you can do a short sale while a chapter 7 bankruptcy case is pending, but the bankruptcy court has to first grant a relief from the automatic stay. While the lender can file a motion for relief from the automatic stay, it is unlikely that the lender will do so to make a short sale possible. They don't want to incur any more expenses than absolutely necessary. Banks usually file a motion only to be able to proceed with the foreclosure. If you want to short sell and you don't want to wait until after the chapter 7 discharge, you or your attorney have to file the motion for relief from the automatic stay which releases the property from the bankruptcy estate. It only makes sense for you to do that if you are absolutely certain that the lenders are willing to work with you on a short sale because once the relief from the automatic stay has been grantedm, the bank is no longer barred from proceeding with the foreclosure if you are in default.
1 user found this answer helpful
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.