Can You Sell A House After Filing Chapter 7 Bankruptcy In Virginia?

Are you facing the possibility of filing for Chapter 7 bankruptcy? Many individuals have found relief through this option during times of financial uncertainty. However, if you’re a homeowner in popular areas like Virginia, you may wonder about the fate of your property. 

If you’re in a hurry and thinking “I want to sell my house fast in Norfolk”, worry not. At Coastline Home Buyers we can offer immediate solutions, and not only in Norfolk, also, we buy houses in Newport News. Don’t hesitate to contact us.

So, can you sell your home while in chapter 7? In this article, we’ll explore the Chapter 7 filing process and the bankruptcy laws in Virginia. Let us address common concerns regarding homeownership. Additionally, we’ll provide valuable insights into bankruptcy laws, steps to safeguard your home ownership, and post-bankruptcy sale options.

What is Chapter 7 Bankruptcy

Chapter 7 bankruptcy, often called “liquidation bankruptcy.” It is a legal process designed to provide you with a fresh financial start. How? The Bankruptcy court eliminates certain debts. In a Chapter 7 bankruptcy, a court-appointed trustee sells nonexempt assets to repay creditors, and any remaining eligible debts are typically discharged. 

It means the debtor is no longer legally obligated to repay them. This form of bankruptcy is for individuals or businesses struggling with overwhelming debt. However, you must understand that not all debts are dischargeable under Chapter 7, such as student loans, child support, and certain tax obligations. 

Additionally, eligibility for Chapter 7 bankruptcy is subject to means testing. When you file bankruptcy, the court determines if your income falls below the state’s median income level or if you have enough money. 

Bankruptcy Laws in Virginia

When you live in a famous region like Virginia, you need to get legal advice from a bankruptcy lawyer to proceed. Bankruptcy laws in Virginia govern the process by which individuals and businesses in the state can seek relief from overwhelming debt. Here are some important aspects of bankruptcy laws in Virginia:

Chapter 7 and Chapter 13 Plan

Like in other states, Virginia residents primarily file for either Chapter 7 or Chapter 13 bankruptcy. While Chapter 13 deals with setting up a repayment plan to pay off debts over time, Chapter 7 deals with the liquidation of assets to pay off debts.

Means Test

Individuals filing for Chapter 7 bankruptcy in Virginia must pass a means test to determine eligibility. This test compares the debtor’s income to the state median income and their credit score for debt relief. If their income is below the median, they may qualify for Chapter 7.


Virginia provides its residents with exemptions to protect certain assets from liquidation during bankruptcy. These exemptions include equity in a primary residence, personal property such as clothing and household goods, retirement accounts, and tools of the trade, among others.

Homestead Exemption

Virginia’s homestead exemption allows debtors to protect a certain amount of equity in their primary residence from creditors during bankruptcy proceedings. The amount of the exemption varies depending on the county or city where the debtor resides.

Credit Counseling and Education

When bankruptcy filing in Virginia, you must complete credit counseling and debtor education courses from approved agencies. These courses aim to provide financial management skills and help debtors make informed decisions about their financial future.

Automatic Stay 

Filing for bankruptcy in Virginia triggers an automatic stay. It means the law office halts most creditor actions, including collection efforts, wage garnishments, and foreclosure proceedings. This provides debtors with immediate relief from creditor harassment and gives them time to pursue a fresh start financially.

Differences Between Chapter 7 & Chapter 13 Bankruptcy

Chapter 7 and Chapter 13 bankruptcy are two distinct forms of bankruptcy under the United States Bankruptcy Code. Each of them offers different solutions for individuals and businesses facing financial difficulties. Here are the key differences between Chapter 7 and Chapter 13 bankruptcy:


Chapter 7: The primary objective of Chapter 7 bankruptcy is to discharge certain debts by liquidating nonexempt assets. It means that a court-appointed trustee sells the debtor’s nonexempt property to repay creditors, and any remaining eligible debts are discharged.

Chapter 13: Chapter 13 bankruptcy, often referred to as “reorganization bankruptcy” or “wage earner’s plan,” aims to create a manageable repayment plan for debtors to settle their debts over three to five years. Debtors typically keep their assets and make monthly payments to a trustee, who then distributes the funds to creditors.


Chapter 7: Eligibility for Chapter 7 bankruptcy is subject to a means test, which compares the debtor’s income to the state median income. If the debtor’s income falls below the median or if they can demonstrate an inability to repay debts, they may qualify for Chapter 7.

Chapter 13: There are no strict income limits for Chapter 13 bankruptcy, but debtors must have a steady income to propose and maintain a repayment plan. Chapter 13 is often suitable for individuals who have regular income but are unable to meet their debt obligations.

Asset Protection

Chapter 7: In Chapter 7 bankruptcy, the debtor’s nonexempt assets may be sold by the trustee to repay creditors. However, debtors can typically retain certain exempt property, such as a primary residence (up to a certain equity limit), personal belongings, retirement accounts, and tools of the trade.

Chapter 13: Debtors retain possession of their assets in Chapter 13 bankruptcy, as long as they adhere to the terms of the court-approved repayment plan. It allows debtors to catch up on missed mortgage or car payments while keeping their property.


Chapter 7: Chapter 7 bankruptcy proceedings typically last a few months, with the discharge of eligible debts occurring shortly after the liquidation process is complete.

Chapter 13: Chapter 13 bankruptcy involves a repayment plan spanning three to five years, during which debtors make regular payments to the trustee. Upon completion of the plan, remaining eligible debts are discharged.

Debt Discharge

Chapter 7: Eligible unsecured debts, such as credit card debt and medical bills, are discharged upon the successful completion of the bankruptcy process.

Chapter 13: Debtors receive a discharge of eligible debts after the successful completion of the court-approved repayment plan, which may include a portion of unsecured debts.

Can You Sell A House After Filing Chapter 7 Bankruptcy In Virginia?

How Long Does It Take To Sell a House in Chapter 7 Bankruptcy

Now let us discuss the main concern – how soon after Chapter 7 can I sell my house? The timeline for selling a house in Chapter 7 bankruptcy can vary depending on various factors.

It includes the specifics of the bankruptcy case, attorney-client relationship, state laws, market conditions, and the complexity of the property sale. Here’s a general overview of the process and the typical time frame idea:

Automatic Stay 

When a debtor files for Chapter 7 bankruptcy, an automatic stay goes into effect. It halts most creditor actions, including foreclosure proceedings and the sale of the debtor’s assets, including their house.

Trustee Appointment 

In Chapter 7 bankruptcy, a court-appointed trustee will oversee the liquidation of the debtor’s nonexempt assets to repay creditors. The trustee evaluates the debtor’s assets, including the house, to determine if they can be sold to satisfy outstanding debts.

Listing the Property

Once the trustee determines the house is an asset, they will work with a real estate agent to list the property for sale. The timeline for listing the property can vary depending on market conditions and the availability of interested buyers.

Sale Process

After the house is listed, potential buyers may visit the property, make offers, and negotiate terms with the trustee or their representative. Once they receive an acceptable offer, the sale process can move forward.

Court Approval 

In some cases, the sale of the house may require court approval. This typically occurs if there are multiple offers on the property or if the sale price is significantly lower than the property’s appraised value.


Once the sale is approved, the closing process begins. This involves finalizing the sale agreement, transferring ownership of the property to the buyer, and disbursing funds to creditors as directed by the court.

What to Do When Selling a House in Chapter 7 Bankruptcy in Virginia

When selling a house in Chapter 7 bankruptcy in Virginia, you need to adhere to specific steps for a successful outcome. Begin by consulting your bankruptcy attorney to understand the legal implications and requirements involved in the sale. Notify the bankruptcy trustee overseeing the case of your intention to sell the property. 

Then you can obtain a professional valuation to determine its fair market value. Work with a qualified real estate agent to list the house on the market, ensuring accurate disclosure of its bankruptcy status. Review and negotiate offers with the trustee’s guidance, seeking court approval if necessary. 

Proceed with the closing process once an offer is accepted, working closely with your attorney, real estate agent, and trustee. Disburse the sale proceeds as instructed by the trustee to repay creditors. 

Finally, obtain a discharge of eligible debts, providing you with a fresh financial start. Throughout the process, maintain open communication with all parties involved to ensure compliance with bankruptcy laws.

Final Thoughts

Selling a house after filing Chapter 7 bankruptcy in Virginia requires careful navigation of legal procedures and communication with relevant parties. While Chapter 7 provides a path to discharge certain debts and potentially sell assets to repay creditors, the process involves various steps and considerations. 

Consult a bankruptcy attorney or a real estate expert like Coastline Homebuyers to list the property. Each stage demands attention to detail and adherence to bankruptcy laws. 

By maintaining open communication with trustees, real estate experts, and attorneys, you can proceed with your houses’ pending sale or sell your house with a mortgage

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