Filing for bankruptcy is stressful enough. But what if you also own a home in Bergen County with significant equity? Can you sell it? Should you sell it? And how does the bankruptcy court factor into your decision?
Let’s break down the real answers in plain English, no legalese, no fluff.
📅 The Big Picture: Bankruptcy Doesn’t Always Mean You Lose Your House
A common myth is that filing bankruptcy means you automatically forfeit your home. That’s simply not true. In fact, many homeowners keep their properties through the process. But whether you can (or should) sell your home during bankruptcy depends on several key factors:
- The type of bankruptcy you file (Chapter 7 vs Chapter 13)
- How much equity you have in your home
- Whether you’re behind on payments or in foreclosure
- Your goals: debt relief vs financial reset vs staying in the home
If you own property in Bergen County, where home values have climbed significantly over the past decade, your home may be your biggest asset and also your best escape hatch from overwhelming debt.
🔹 Chapter 7 vs Chapter 13: What’s the Difference?
Chapter 7 Bankruptcy
This is liquidation bankruptcy. The court assigns a trustee to sell non-exempt assets to pay creditors. However, New Jersey allows certain exemptions, meaning you can protect a portion of your home equity. In 2025, the federal homestead exemption is $27,900 for individuals and $55,800 for married couples filing jointly.
If your home has more equity than the exemption allows, the trustee may sell it. But if your equity falls under that cap, you may be able to keep your home or sell it yourself with court approval.
Chapter 13 Bankruptcy
This is a reorganization plan. You create a 3-to-5-year repayment plan approved by the court. You typically keep your property, including your house. If you’re behind on your mortgage, Chapter 13 lets you catch up on missed payments while keeping the home.
Selling your home during a Chapter 13 plan is possible, but it requires court permission and coordination with the trustee.
🏡 How Much Equity Do You Actually Have?
This is the first thing you need to know. Bergen County real estate has appreciated dramatically, and many homeowners sitting on old mortgages have six figures in untapped equity.
Let’s say you bought your home 10 years ago for $400,000. Today, it’s worth $675,000 and you owe $250,000 on the mortgage. That’s $425,000 in equity.
In bankruptcy, this isn’t just a number, it’s leverage. You may be able to:
- Use proceeds from a sale to pay off debt
- Avoid foreclosure or repossession
- Start fresh with cash in hand
But it must be done the right way to comply with bankruptcy rules.
🔒 Selling During Chapter 7: When and How
If you file Chapter 7, do not sell your house without trustee or court approval. Doing so could result in serious consequences.
That said, you may be able to sell:
- Before filing: This gives you control but must be done transparently and legally.
- After filing, with trustee approval: You may propose a sale to the court, especially if your equity exceeds exemption limits.
In either case, you’ll need to work with a bankruptcy attorney who understands the real estate process and a real estate agent (like NJ House Partners) who has experience navigating these unique situations.
🧳 Selling During Chapter 13: A Bit More Flexibility
Chapter 13 filers have more control, but still need court approval to sell.
You’ll typically submit a motion to the court explaining why you want to sell and what you plan to do with the proceeds. The trustee and judge will want to ensure:
- The sale is at fair market value
- Creditors are properly paid
- Any remaining funds are used appropriately
Once approved, you can list and sell your home like any traditional sale.
Pro tip: Selling during Chapter 13 can even help you pay off your plan early and exit bankruptcy faster.
📊 Why Bergen County Homeowners Have an Advantage
In towns like Ridgewood, Hackensack, Paramus, and Teaneck, home values have remained strong. Even in a shifting market, inventory is tight and buyer demand remains steady.
If you need to sell fast but don’t want to sacrifice value, working with a hybrid agent-investor like NJ House Partners gives you options:
- Full-price MLS listing if the home is in good condition
- As-is cash offers if the property needs work or you need a fast, private sale
- Assistance navigating court approvals and timelines
🤝 You’re Not Alone: Help Is Available
Bankruptcy is overwhelming, but it doesn’t have to be the end of your financial story. Selling your Bergen County home could be the fresh start you need as long as you follow the rules.
At NJ House Partners, we understand how to work with attorneys, trustees, and courts to get your home sold legally, ethically, and for top dollar. We’ll provide a free equity analysis and custom strategy based on your situation.
No pressure. Just real help.
📈 Bottom Line:
- Bankruptcy doesn’t automatically mean losing your home.
- You can often sell your home but court permission is key.
- Your home equity can be a powerful tool to resolve debt and move forward.
- Bergen County homes tend to have strong value, even in 2025’s market.
If you’re in bankruptcy and considering selling, let’s talk. A quick consultation could save you time, stress, and thousands of dollars.
Kevin Hill | NJ House Partners
📞 201-214-1349
📌https://njhousepartners.com