How to Sell Your Bankruptcy House Fast in Minnesota

Filing for bankruptcy is a challenging process—financially, emotionally, and legally. If you’re a homeowner in Minnesota trying to navigate bankruptcy while also looking to sell your house fast, you’re not alone. Whether you filed Chapter 7 or Chapter 13, selling your home is still possible—but it must be done correctly to avoid legal complications and delays.

In this guide, we’ll walk you through the steps to sell your bankruptcy house fast in Minnesota, with options tailored to your unique financial situation.

Can You Sell a House While in Bankruptcy?

Yes, but the process depends on the type of bankruptcy you filed:

📝 Chapter 7 Bankruptcy (Liquidation)

• The court assigns a trustee to sell your non-exempt assets, including your home (if it has equity beyond your exemption).
• You must get court approval before selling.
• If the house is exempt or the trustee abandons it, you may be able to sell it yourself.

💼 Chapter 13 Bankruptcy (Repayment Plan)

• You can usually keep your home and repay your debts over time.
• You can sell, but you need approval from the bankruptcy trustee and court.
• The proceeds may go toward paying your creditors.

Step 1: Inform Your Bankruptcy Attorney

Before taking any steps toward selling your home, talk to your bankruptcy attorney. They will:

• Review your bankruptcy plan or filing
• Determine if your home is protected under Minnesota’s homestead exemption (up to $480,000 as of 2025)
• Help you petition the court for permission to sell

⚖️ Court approval is legally required, and acting without it can result in penalties or dismissed bankruptcy protection.

Step 2: Get Court or Trustee Approval to Sell

Whether you filed Chapter 7 or 13, you’ll need permission from:

• The bankruptcy court
• The trustee assigned to your case

You may be asked to:

• Provide a purchase agreement or estimated sale price
• Justify why the sale is in the best interest of creditors
• Show how the proceeds will be used

This step is essential—even if you’re behind on your mortgage or facing foreclosure.

Step 3: Decide How You Want to Sell

There are two main ways to sell a bankruptcy house quickly in Minnesota:

💰 1. Sell As-Is to a Cash Home Buyer

This is the fastest and least stressful way to sell. Benefits include:

• No need for repairs, cleaning, or staging
• No real estate agent commissions
• Close in as little as 7–21 days
• Buyers who are familiar with bankruptcy timelines

✅ Ideal for: Urgent financial situations, homes in poor condition, or when avoiding foreclosure is a priority.

🏠 2. List with a Real Estate Agent

If the home is in good condition and you have time:

• You may get more money by listing on the MLS
• An experienced agent can help coordinate with the trustee and court

❗Be sure to choose a Minnesota agent experienced in bankruptcy sales.

Step 4: Be Transparent and Price Realistically

Buyers will want to know:

• That the sale is court-approved
• Whether there are any liens or title issues
• If the sale timeline is flexible or court-dependent

To attract fast offers:

• Price below market value if you’re selling as-is
• Be upfront about legal timelines and approval needs
• Offer flexible showing and closing options (if listing traditionally)

Step 5: Close the Sale and Apply the Proceeds

Once the court approves the sale:

• A local Minnesota title company or attorney will handle closing
• The proceeds will be distributed to:
  • The mortgage lender (to pay off the balance)
  • Bankruptcy trustee (to satisfy debts)
  • You (if any exempt funds remain)

Your attorney will ensure all funds are accounted for properly.

Bonus Tip: Sell Before Foreclosure Happens

If you’re in bankruptcy and behind on your mortgage, selling the home fast can help you:

• Avoid foreclosure
• Protect your credit further
• Eliminate burdensome monthly payments
• Potentially walk away with equity

Timing is everything. Selling before your mortgage lender begins foreclosure proceedings gives you more control and options.

Final Thoughts

Selling a house while in bankruptcy in Minnesota is 100% possible, and you can do it fast with the right approach and legal guidance.

To recap:

✅ Talk to your bankruptcy attorney
✅ Get trustee and court approval
✅ Choose between a cash buyer or agent
✅ Be transparent with buyers and price to sell
✅ Close quickly and apply proceeds legally

Whether you’re looking for relief from overwhelming debt, trying to avoid foreclosure, or simply seeking a fresh start, selling your home may be the smartest financial move during bankruptcy.