MAY I SELL MY PROPERTY WHILE I AM IN BANKRUPTCY?
First, we must determine what is property? Property is anything that a debtor owns whether real, personal or of whatever kind and nature. Everything is property, not just houses and land.
The selling of property by a debtor is determined by what type of bankruptcy case youhave filed. When a case is filed, a bankruptcy estate is established. A debtor’s right to sell assets of the bankruptcy estate is determined by several factors.
If you file a Chapter 7 case, the Trustee in your case will abandon most of the assets at the 341 hearing. If the assets are abandoned, you may sell those assets without further Order or permission of the Bankruptcy Court.
Oftentimes, at the 341 hearing, the Chapter 7 Trustee will declare some of the property of the debtor as having sufficient value that the Trustee wants to take a further look at the property. Although other property will be abandoned and no longer property of the Bankruptcy Estate, the Trustee will investigate the property not abandoned and make a determination if the property is worth selling so that property can be sold and the proceeds distributed among your creditors.
If, after further examination the Trustee determines that the property cannot be sold so that there will be money for the creditors of the debtor, then the Trustee will abandon the property and the debtor is free to sell the property abandoned.
In Chapter 11, 12 and 13 cases, the debtor may sell property only as approved by the Court. A motion to sell must be made and the property can only be sold with the approval of the Court.