Selling a House During Bankruptcy in Florida: Chapter 7, Chapter 13 and a Cash Buyer Who Works With Your Attorney

Home › Seller Situations › Bankruptcy · Updated October 25, 2026

Watch: Bankruptcy: Sell My House Fast in Fort Myers

A short explainer on selling a house while in or near bankruptcy, and why your bankruptcy attorney and the trustee need to be part of the sale.

Filing for bankruptcy changes who gets a say in the sale of your home. Before the petition, you could sign a contract with anyone you liked. After it, the property usually becomes part of a bankruptcy estate, a trustee may have rights over it, and in most situations a federal judge has to sign off before anything closes. Many homeowners don’t learn this until a buyer has already backed out because a title company refused to insure a sale that was never approved.

This page explains, in plain English, how a house sale generally works inside a Florida bankruptcy case, what the Florida homestead exemption does and does not protect, how a sale can interact with a pending foreclosure, and where a cash buyer fits. It is written to help you ask better questions — not to replace your lawyer. Every bankruptcy is different, and a Florida bankruptcy attorney must guide any sale you make while a case is open or about to be filed. Libera Capital Group is a buyer, not a law firm; we coordinate with your counsel and the trustee, and we put everything in writing so they can evaluate it.

Our home market is Southwest Florida — Lee, Collier, Charlotte, Sarasota and the inland counties — but we buy throughout the state. Most Southwest Florida bankruptcies are filed in the Fort Myers Division of the U.S. Bankruptcy Court for the Middle District of Florida, and the same general federal rules apply wherever your case is pending.

Why Owners in Bankruptcy Ask Libera Capital Group for an Offer

How Does Bankruptcy Change Who Controls the Sale of Your House?

When a bankruptcy petition is filed, federal law creates a bankruptcy estate. In broad terms, that estate includes nearly everything you own on the filing date — your house, rental properties, a share of a family property, even a business building held in your name. From that moment the question is no longer only “do I want to sell?” but also “who has the authority to sell, and who has to approve it?”

The automatic stay

Filing also triggers the automatic stay, a federal injunction that generally stops most collection activity — including a mortgage foreclosure, a foreclosure sale date, and most lawsuits by creditors — while the case is pending. The stay is powerful, but it is not permanent. A secured lender can ask the court for “relief from stay” to resume a foreclosure, and the stay can be limited or absent for people who have had another case dismissed recently. Your attorney will know whether the stay is fully in effect in your case.

Why title companies care

A Florida title insurer will not insure a buyer’s title if the seller was in an open bankruptcy and the sale was not properly authorized. That is the practical reason a casual sale during a case fails: even a willing buyer and seller cannot close without the paperwork that shows the trustee or court approved the transaction. When we underwrite a deal, one of our first calls is to the title company, which checks the federal court records for any open case in the owner’s name.

Whose property is it, really?

Ownership can get complicated. A house titled to a married couple as tenants by the entirety, a property owned by an LLC rather than by you personally, or a home you co-own with a sibling may be treated very differently from a house titled to you alone. These are exactly the questions to put to your bankruptcy attorney before you sign any contract — ours included.

Selling a House in Chapter 7 Bankruptcy

Chapter 7 is often called “liquidation” bankruptcy. A court-appointed Chapter 7 trustee reviews your assets, identifies anything that isn’t protected by an exemption, and can sell non-exempt property to pay creditors. Many Chapter 7 cases are “no-asset” cases in which nothing is sold, but real estate with equity tends to get attention.

When the trustee may want to sell

If a property has meaningful equity that no exemption protects — common with a rental house, a vacation condo, a second home in another county, or a homestead that doesn’t qualify for full protection — the trustee may decide to sell it for the benefit of creditors. In that case, the trustee, not you, generally controls the sale. The trustee may hire a broker, accept offers, and ask the court to approve the sale. Buyers like Libera Capital Group can make offers to the trustee just as we would to an owner.

When the trustee abandons the property

If a house has little or no equity after the mortgage, liens and costs of sale, a trustee often has no reason to sell it and may abandon the estate’s interest. Abandonment, or the closing of the case, can return control to you. Even then, the mortgage lender keeps its lien, so you may still need to sell or work something out with the servicer. Your attorney can tell you whether the trustee has abandoned the property or is still evaluating it.

Negotiating with the trustee

Sometimes a debtor wants to keep or sell a property on their own terms and offers to pay the trustee the value of the non-exempt equity instead. Those negotiations are handled by counsel. Our role is narrow: if a sale is what makes sense, we provide a clear, as-is price the trustee can compare against the cost and delay of listing the property.

What a Chapter 7 discharge does to the mortgage

A discharge typically wipes out your personal liability on many debts, potentially including a mortgage, but the lender’s lien on the house generally survives. That surprises many owners: after a discharge, the bank can still foreclose if payments stop, even though it can’t pursue you personally for the shortfall on a discharged debt. A sale is one way to resolve that lingering lien on your schedule.

Selling a House in Chapter 13 Bankruptcy

Chapter 13 is a repayment bankruptcy. You keep your property and propose a plan, usually lasting three to five years, to pay creditors over time — often including mortgage arrears. Because you keep possession, people assume they can sell freely. In practice, property you own during a Chapter 13 case remains under the court’s supervision, and a sale of real estate generally requires a motion and a court order.

Why owners decide to sell mid-plan

Plans that looked workable at confirmation can stop working. A homeowner’s insurance premium doubles, a special assessment arrives, a job changes, or storm damage adds a repair bill the plan never anticipated. Selling can let you pay the plan off early, pay the mortgage in full, or convert trapped equity into money for a fresh start — if the court allows it.

What the motion usually covers

Your attorney typically files a motion to sell describing the buyer, the price, the terms, and how the proceeds will be distributed — mortgage payoff, closing costs, any exempt amount paid to you, and any portion that must go to the Chapter 13 trustee for unsecured creditors. Creditors receive notice and a chance to object. Courts frequently want to see that the buyer is not an insider and that the price is fair, which is why an independent written offer and, where useful, an appraisal or broker opinion help.

Timing details that affect closing

Under the federal bankruptcy rules, an order authorizing a sale is generally stayed for 14 days after it is entered unless the court orders otherwise, so the closing date is usually set after that window. Some motions ask the judge to waive that waiting period. We plan the contract around these steps so no one is rushing to close before the order is final.

Selling vs. curing arrears

Chapter 13 is often used specifically to save a home by catching up past-due payments over the plan. Selling is the opposite strategy. Neither is right for everyone: if you want to stay and the numbers work, a plan may be the better path; if the house has become unaffordable, a sale may stop the bleeding. That decision belongs to you and your attorney. We are happy to give you a no-obligation number so the comparison is based on real figures.

How Does the Florida Homestead Exemption Work in Bankruptcy?

Florida has some of the strongest homestead protections in the country. The Florida Constitution protects a qualifying primary residence from most creditors with no dollar limit, subject to size limits: generally up to one-half acre of contiguous land inside a municipality, or up to 160 acres outside one. Florida has opted out of the federal exemption list, so Florida residents generally use Florida’s exemptions in bankruptcy.

Federal limits that can apply

Federal bankruptcy law layers several restrictions on top of Florida’s protection. These are the ones homeowners most often hear about from their lawyers:

• Residency. To use Florida’s exemptions, a debtor generally must have been domiciled in Florida for the 730 days (two years) before filing; recent arrivals may be limited to another state’s exemptions or the federal list.
• Recently acquired equity. Homestead equity acquired within 1,215 days (about 40 months) before filing can be capped. The cap is adjusted every three years; for cases filed on or after April 1, 2025, it is $214,000. Rolling equity over from an earlier Florida homestead may be treated differently.
• Fraudulent conversions. Moving non-exempt money into a homestead within ten years before filing with intent to hinder, delay or defraud creditors can reduce the exemption.
• Certain debts. Specific categories of misconduct-related debts can trigger the cap regardless of timing.

What isn’t protected

The homestead exemption covers your primary residence. A rental property, a seasonal condo you don’t live in, a second home, or a commercial building is generally not homestead, and equity in those properties is often what a Chapter 7 trustee looks to sell. Florida’s other exemptions are relatively modest, so non-homestead real estate with equity deserves early attention from your attorney.

What about the money from selling your homestead?

Florida courts have long recognized that proceeds from the sale of a homestead can keep their protected character in some circumstances — generally when the owner intends to reinvest them in a new Florida homestead within a reasonable time and keeps the funds separate rather than spending them on other things. The rules are fact-specific and the interplay with a bankruptcy case is technical. If you plan to sell your homestead and buy another, ask your attorney exactly how the proceeds should be held, and tell the title company before closing so the disbursement matches the court order.

Homestead has property-tax meanings too — the homestead exemption on your tax bill and the Save Our Homes cap are separate from bankruptcy protection. If you are dealing with unpaid property taxes or tax certificates alongside the case, see our guide to selling with back taxes and liens.

Can Bankruptcy and a Sale Stop a Foreclosure in Florida?

Many people file bankruptcy precisely because a foreclosure sale date is approaching. The automatic stay generally halts the sale while the stay is in effect, which can buy time to reorganize — or to sell. A sale during the case can pay off the mortgage in full, end the foreclosure lawsuit, and potentially leave equity for you, rather than letting the property go to the clerk’s auction.

A few cautions apply. Lenders frequently move for relief from the stay, especially when payments aren’t being made after filing, and the court may grant it. People with a prior case dismissed within the past year may get only a short or limited stay, and those with multiple recent dismissals may get none at all unless the court orders otherwise. Filing to stall without a real plan can backfire. A bankruptcy attorney — not a buyer, and certainly not a “foreclosure rescue” company that asks for money up front — is the right person to advise on whether and when to file.

If you are not in bankruptcy and simply want to understand the Florida foreclosure timeline, lis pendens, reinstatement and short sales, our foreclosure guide covers that ground in detail, and our page on short sales explains what happens when you owe more than the house is worth. For income property owners, see commercial foreclosure and receivership.

Should You Sell Before Filing Bankruptcy or After?

This is one of the most important questions to ask your attorney, and the answer depends on your equity, your exemptions, your debts and your goals. Here are the general considerations attorneys raise with homeowners:

• Selling before filing can be simpler — no motion, no trustee — and sometimes the sale solves the problem so bankruptcy is unnecessary. But what you do with the proceeds matters. Paying back a relative, transferring money, or buying assets shortly before filing can be scrutinized and reversed in a later case.
• Selling below value or to a family member before filing can be challenged as a fraudulent or preferential transfer. An arm’s-length sale to an independent buyer at a supportable price is far easier to defend.
• Selling after filing means working through the trustee or court, but it also comes with the protection of the automatic stay and a court order that gives everyone — you, the buyer and the title insurer — certainty that the sale is valid.
• Converting equity into exempt assets before filing is a heavily regulated area. Do not move money around on the advice of anyone but your own counsel.

Our practical advice is simply to talk to a bankruptcy attorney before you sign a purchase contract with anyone. If you already have a lawyer, we’ll send them our offer and contract draft directly. If you don’t, The Florida Bar’s lawyer referral service and local legal aid programs can help you find one.

Bankruptcy and Property Problems We See in Southwest Florida

Bankruptcy rarely arrives alone. In our home market, the financial pressure that leads to a filing often comes from the property itself. These are patterns our team regularly encounters when owners in Lee, Collier, Charlotte and Sarasota counties contact us:

Storm repairs that outran the insurance check

After Hurricane Ian in 2022 and Helene and Milton in 2024, many owners took on debt to repair homes when claims were delayed, underpaid or denied. Contractors’ liens, credit cards and personal loans piled up. A house that still needs drywall, electrical or roof work is hard to list but straightforward for us to buy as-is. For storm-specific issues, see hurricane and flood damage.

Premiums, assessments and association balances

Rising homeowners insurance, condo special assessments tied to structural inspection and reserve laws, and HOA delinquencies can turn an affordable home into an unaffordable one. Associations can place liens for unpaid assessments, and those balances must be resolved at closing. Our guide to condo special assessments covers that piece.

Second homes and rentals

Southwest Florida has many owners with a primary home elsewhere, or a local homestead plus a rental duplex or seasonal condo. Non-homestead property is usually where a trustee looks first. We buy tenant-occupied and seasonal properties; landlords may also want to read about selling a rental you’re tired of managing.

Small-business owners

Restaurant, retail and trades owners sometimes file personally after a business fails, with a building, a warehouse unit or a mixed-use property in the mix. A business bankruptcy (often Chapter 11 or Subchapter V) has its own rules, but the same principle applies: court-supervised sales need an organized, credible buyer. See how we buy commercial property and distressed commercial real estate.

Divorce and bankruptcy together

When a marriage ends and debts are unmanageable, a house may be subject to both a family court order and a bankruptcy case. Coordinating two sets of lawyers is common in these files. Our page on selling during a divorce explains the family-law side.

Bankruptcy Sale Options Compared

This table describes typical patterns, not promises — your attorney’s view of your case controls.

A cash, as-is price is usually lower than what a fully repaired house might bring on the open market. That trade-off is the reason we encourage owners to compare. Our cash offer vs. listing comparison walks through the costs of each path.

How a Court-Approved Sale to Libera Capital Group Works

1. Talk to your attorney, then to us. Share the address, your case chapter and your attorney’s contact information. We don’t need your bankruptcy schedules — just enough to evaluate the property.
2. Receive a written as-is offer. We look at the house (or photos), check comparable sales and title, and send a written offer with our entity details, proof of funds and proposed title company, usually within a day or two of getting the information.
3. Your attorney files for approval. If the case requires it, counsel files the motion to sell using our contract. We cooperate with the trustee’s questions and wait for the order without changing the price over the delay.
4. Close at a Florida title company. After the order is entered and any waiting period runs, the title company pays the mortgage and liens, sends any amount the order requires to the trustee, and disburses what belongs to you. Our general process is outlined on how it works.

Properties and Related Situations

We buy single-family homes, condos and townhomes, duplexes and small apartment buildings and mobile and manufactured homes, along with retail, office, industrial and mixed-use property. Owners in bankruptcy often face related problems too:

• Foreclosure
• Short sale
• Back taxes & liens
• Inherited & probate property
• Problem tenants
• Vacant property
• Major repairs & fire damage
• Code violations

Where we buy: our home base is Southwest Florida — Lee County, Collier County, Charlotte County and Sarasota County — and we buy statewide through our Florida locations.

Who Buys Houses in Bankruptcy in Florida?

Libera Capital Group buys houses and commercial property from Florida owners in Chapter 7 and Chapter 13, and from trustees selling estate property, for cash and as-is. Sellers in bankruptcy typically compare a few kinds of buyers: local cash buyers like us, national “we buy houses” networks and iBuyers, individual investors and landlords, and retail buyers reached by listing with an agent. Each can work; what matters in a bankruptcy is whether the buyer will wait for court approval, close through a reputable title company, and accept the property as it is.

A local buyer with an office in Fort Myers knows the Southwest Florida issues that complicate these files — storm-damaged homes, insurance problems, association liens and seasonal properties — and can meet on short notice. Retail listing may bring a higher price for a house in good condition, and your attorney or the trustee may prefer to test the market. We’re comfortable being one of the offers they weigh. For the U.S. Bankruptcy Court’s own forms and procedures, see the Middle District of Florida Bankruptcy Court.

Frequently Asked Questions About Selling a House in Bankruptcy