Bankruptcy and Your Home: What You Need to Know and How to Move Forward

Facing bankruptcy can feel overwhelming, especially when your home is on the line. Many homeowners wonder: Will I lose my house? Can I sell my home before bankruptcy? What are my options?  

At MG Property Bros, we help homeowners in financial distress sell their homes quickly for cash—without the stress of waiting months, making repairs, or paying realtor fees. This guide will help you understand how bankruptcy affects your home and what you can do next.  

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What Is Bankruptcy?  

Bankruptcy is a legal process that helps individuals or businesses eliminate or repay debt under court supervision. While bankruptcy can provide financial relief, it also affects your credit, assets, and home ownership.  

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There are two main types of bankruptcy for individuals:  

- Chapter 7 Bankruptcy – Liquidation of assets to pay debts. In some cases, you may lose your home if it is not protected under state homestead exemptions.  

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- Chapter 13 Bankruptcy – A repayment plan allowing you to keep your home while making structured payments over 3-5 years.  

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How Does Bankruptcy Affect Your Home?

1. Can You Keep Your Home in Bankruptcy? 

- If you file for Chapter 7, the court may sell your home to pay creditors unless your state’s exemption laws protect it.

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- If you file for Chapter 13, you can keep your home as long as you continue making mortgage payments.  

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2. Will Bankruptcy Stop Foreclosure?  

- Filing for bankruptcy triggers an automatic stay, which temporarily halts foreclosure.  

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- However, lenders can petition to lift the stay and continue foreclosure if you’re behind on mortgage payments.  

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3. Can You Sell Your Home During Bankruptcy?

- Yes, but you’ll need **court approval** to sell your home during the bankruptcy process.  

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- Selling to a cash buyer like MG Property Bros can help you settle debts faster and avoid complications.  

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Options If You’re Facing Bankruptcy and Need to Sell  

If bankruptcy is on the horizon and you’re unsure about keeping your home, consider these options:

1. Sell Your Home Before Filing for Bankruptcy

Selling your home before bankruptcy can help you pay off debts and avoid the legal process altogether. A fast sale for cash can give you financial freedom without the long-term effects of bankruptcy.  

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2. Sell Your Home During Bankruptcy (With Court Approval)

If you're already in bankruptcy, you can request court permission to sell your home. This option allows you to settle outstanding mortgage debt and other obligations.

3. Negotiate a Short Sale

If you owe more than your home is worth, you may qualify for a short sale, where the lender agrees to accept less than the full balance owed.  

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4. Walk Away Through a Deed in Lieu of Foreclosure

A deed in lieu of foreclosure allows you to transfer ownership to the lender in exchange for cancellation of your mortgage debt.  

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Why Selling to MG Property Bros Is the Best Solution

When dealing with bankruptcy and homeownership, you need a fast, hassle-free solution. That’s where MG Property Bros comes in:  

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We Buy Homes As-Is – No repairs, no cleaning, no showings.  

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Fast Closing – Sell your home in as little as 7 days.  

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No Realtor Fees – Keep 100% of your cash offer.  

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We Handle the Paperwork– Our team takes care of everything for you

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