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Can You Sell Your House After Filing Chapter 7 In Missouri

Sell a house as is in Kansas City. If you find yourself in a financial bind that forces you to declare bankruptcy, do you know if you can sell your house after filing for Chapter 7 bankruptcy? And do you know the difference between Chapter 7 and Chapter 13 bankruptcy? Knowing the answers to these questions could be the difference between you walking away with cash in your pockets and walking away with nothing following a foreclosure on your Missouri house

If you’re buying a new home or considering selling, it’s critical to be aware of the policies around chapter 7 bankruptcy. You might not think you’ll ever have to worry about it but recent times have shown us that all it takes is a few quick shifts in the economy and you could find yourself staring down a situation where you need to call a bankruptcy attorney to figure out how to save or sell your Missouri home. 

Let’s take a closer look at Chapter 7 bankruptcy, the difference between that and a chapter 13 bankruptcy, and how to sell your house after filing chapter 7 in Missouri. 

Sell Your House After Filing Chapter 7 In Missouri

Chapter 7 Bankruptcy

What is Chapter 7 Bankruptcy?

When you file for Chapter 7 bankruptcy, whether you’re in Missouri or elsewhere, there are some specific things that are going to happen that you need to understand.

First, let’s understand what it means to declare bankruptcy. When someone is struggling with their ability to repay debts or is facing foreclosure on their house, they can declare bankruptcy. That is essentially a legal process through which you can get relief from your debts or debt collection. It prevents debtors and those whom you owe money from collecting on that debt until your financial situation is resolved, either through legal proceedings or mediation. 

Bankruptcy is not something to be done lightly. It’s often seen as a last resort as it can have major consequences for anyone who declares it. A bankruptcy is going to stay on your credit report for at least seven years and potentially as long as ten years. That will make it harder for you to get new loans, credit cards, or mortgages in the future. It might also mean you’re saddled with higher insurance rates and it can even impact your ability to rent an apartment. So be sure that this is something you have to do before you decide to do it. 

There are different types of bankruptcies you can file, all of which have their own particular reasons, benefits, and drawbacks. Chapter 7 bankruptcy, which is also known as liquidation bankruptcy, helps to clear away many types of unsecured debts that might be saddling your financial situation. It’s a way to hit the reset button on your finances, but it is considered something of a last resort as it can have very negative effects on your credit for a long time.

As soon as you file Chapter 7 bankruptcy, the local Missouri court will place a temporary stay on all current debts. This is why your creditors will be unable to continue collecting payments. They’ll also be unable to garnish your wages, foreclose on your Missouri house, or repossess any property. However, the court takes control of all your property and appoints a trustee to oversee it and your case. 

The trustee will look over your finances and figure out the best course of action. They may sell some property that your bankruptcy won’t allow you to keep and use the proceeds to repay anyone you owe. The trustee will also oversee a creditor meeting, in which you and your creditors will meet at the courthouse to go over the details of your case. 

In Missouri, much of your property will be exempt from sale during Chapter 7 bankruptcy most of the time. However, any property that is not exempt will be sold. That could very well include your house or car, especially if you are behind on payments. Chapter 7 bankruptcy does not eliminate the right of your mortgage holder to take possession of the property they borrowed against in order to cover outstanding debts. 

Missouri does have a state law that protects some of your home equity and if the mortgage loan amount and homestead exemption are higher than the value of the house, the trustee cannot sell it. At that point, they will return ownership of the house to you to sell or transfer in the manner you choose. This is where you can speak to a cash buyer like Offer House to sell your Missouri house as-is and get cash for it. 

It’s important to remember that Missouri is an opt-out state. That means you can’t pick and choose between federal rules and state rules. You are required to follow Missouri exemptions. That means that if you and your spouse file a joint bankruptcy, you can double your exemptions.

It’s also worth noting that it costs around $306 to file for bankruptcy under Chapter 7  in Missouri, regardless of whether it’s for a person or a married couple. The court might let you pay in installments if you can’t do it upfront. But also remember that if you hire an attorney you’ll have to pay for their fees as well. 

Once the process has been completed, which usually takes around four to six months from your filing, the court will discharge any debts that have not been required to be satisfied. You will no longer need to pay those debts back. However, there are certain debts that will not meet this requirement, including alimony, child support, court fees, student loans, and some tax debts

The Difference Between Chapter 7 and Chapter 13

We’ve learned a lot about Chapter 7 bankruptcy and how it applies to those in Missouri considering selling their house. Let’s get to know the alternative and find out the difference between Chapter 7 and Chapter 13 bankruptcy. 

A Chapter 13 bankruptcy is also known as a reorganization bankruptcy. When you file for this kind of protection, you are committing to filing a plan with the court to show how you will pay off some or all of your debts within three-to-five years. The most appealing thing about a Chapter 13 bankruptcy is that it will usually allow you to keep property such as your house or car. 

However, you will likely be required to make new payments in order to keep your property, and while these payments will be less than your previous requirements, they still mean you’ll need to account for the funds to pay them each month. As such, a Chapter 13 bankruptcy requires that you have a certain income and be below certain debt limits in order to qualify. Your payments will be made to the court-appointed trustee, who will then send them to your creditors. Once this plan has been completed, your requirements are over and you will not be required to repay any unsecured debts. The same caveats as with Chapter 7 are in play here as well. 

It costs $281 to file for bankruptcy under Chapter 13 in Missouri. You’ll also have to account for attorney fees and court fees as applicable. Chapter 13 bankruptcy stays on your credit report for even years, compared to the ten years that a Chapter 7 remains, which also makes it more appealing. 

house for sale due to chapter 7 bankruptcy

Selling a House After Filing Chapter 7 Bankruptcy

So now that you know understand Chapter 7 bankruptcy and the pros and cons involved when you file for it in Missouri, let’s answer the question on your mind, “can you sell your house after filing for Chapter 7 bankruptcy?” 

The quick answer is yes. Once you know what your homestead exemption, you’ll know if you’ll be keeping your house or if your trustee has the right to sell it. If they don’t object to the exemption, the trustee will file a “No Distribution Report,” which ends your case. This frees up your house from Chapter 7 and you will once again be the legal titleholder. At that point, you can sell your house however you want. 

In this situation, you might want to sell your Missouri house fast, either because you need cash to pay off your debts or because you simply want to make a lifestyle change to avoid further financial concerns. If that’s the case, consider selling your house as-is to a cash home buyer like Offer House. We buy houses for cash and we buy houses from people who have filed for Chapter 7 bankruptcy. We buy houses as-is, which means you don’t even need to fix anything, make any repairs, or even clean up. We’ll buy your Missouri house in its current condition and we’ll give you cash for it as fast as you want to close. 

All you need to do is contact us and tell us about your property. Someone from our team will reach out to get more information and set up a chance to see the house, either in-person or virtually. Then we’ll make you a fair cash offer. You’re under no obligation to accept it but we’re happy to walk you through how we arrived at the number. If you accept, you decide when we close. If you want to close the sale ASAP, we can usually make it happen within two weeks. Then, you’ll get to walk away with cash in your pocket and have the chance to start fresh. 


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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