How to Sell Your House During Bankruptcy in Knoxville, TN

Selling your house in bankruptcy is not that hard as long as you know the right steps!
Filing for bankruptcy doesn’t necessarily mean you can’t sell your home.

Property or assets you own when you file for bankruptcy become part of your bankruptcy estate. There was a 27 percent increase in chapter 13 bankruptcy filings in October of 2022. Across all chapters of bankruptcy, bankruptcy filings increased seven percent overall, closely matching inflation’s seven percent increase. The debt burden of many homeowners is overwhelming. Due to circumstances beyond their control, they are forced to declare bankruptcy, which stops a foreclosure on their primary residence as a result of a change in their ability to pay creditors. 

Chapter 13 is available to those with debts of less than $2,750,00 in secured and unsecured debt. A chapter 7 bankruptcy, however, is a liquidation process in which the trustee sells your assets to pay your debts based on your income, debt, and ability to repay. Some homeowners wish to sell their houses to alleviate their financial problems, but wonder if it is possible during bankruptcy proceedings. 

Although the process differs based on the type of bankruptcy you file, and many factors impact the final determination, the short answer is yes for most homeowners. Let’s discover how you can sell your house during bankruptcy in Knoxville, TN. As a reminder, this article is for informational purposes, not financial or legal advice.

Court Permission

To sell your house during bankruptcy in Knoxville, TN you’ll need to file a motion with the court for leave to sell real property or approval. In addition to the selling price, you should also include the name of any creditors who hold liens on the property. Upon receiving this motion, creditors and any trustee can object, with the court determining the disbursement of any funds.


Adding a contingency clause to the contract to sell your house during bankruptcy in Knoxville, TN will make the sale conditional on the approval of the bankruptcy court. Nevertheless, a trustee under chapter 7 may sell your house if there is a lot of equity that isn’t protected by your bankruptcy exemption. You will get the exempted amount from the trustee, your secured debts like the mortgage will be paid off, and unsecured creditors will receive their pro-rata share of the remaining funds.


When you sell your house during bankruptcy in Knoxville, TN, you may wonder what happens to any proceeds. Homestead exemptions will play an important role in determining how much you can claim. The proceeds will likely be used to pay any remaining unsecured creditors or to pay for the bankruptcy proceeding.

Planned Payments

In Knoxville, TN you will need to modify your planned payments if you sell your house during bankruptcy. In some cases, you may be able to pay off your bankruptcy plan early based on the realized sale value.

Itemized Payoff Statement

An itemized payoff statement will ensure no fees are left to surprise you after you sell your house during bankruptcy in Knoxville, TN.  

East Tennessee Home Buyers LLC

Don’t wait! It’s the perfect time to cash in on your house and sell to East Tennessee Home Buyers LLC in Knoxville, TN if you want to sell your house during bankruptcy. With low supply and rising interest rates, now is the time to sell your house. With East Tennessee Home Buyers LLC, we want you to be able to choose the sales method that best fits your needs through every step of the process. As a result, a cash investor from East Tennessee Home Buyers LLC will provide you with a detailed breakdown of expenses and profits from a conventional listing with an agent compared to our offer, which you will agree is fair. Our mission at East Tennessee Home Buyers LLC is to make you feel good about working with us long after the deal is finished because we are local neighbors here in Knoxville, TN. 

A guaranteed closing date is provided, no commissions are charged, and no closing costs are incurred, leaving no unpleasant surprises for you. The professionals at East Tennessee Home Buyers LLC have experience handling bankruptcy cases and have the solution you seek. A direct sale to East Tennessee Home Buyers LLC is your best option if you don’t want to spend time and money preparing your house for the Knoxville, TN real estate market. No hidden fees or commissions are charged by East Tennessee Home Buyers LLC. When you sell your property to a cash investor from East Tennessee Home Buyers LLC, you won’t even have to worry about showings. During bankruptcy, a cash investor from East Tennessee Home Buyers LLC will buy your house for cash, as-is, directly from you. Call East Tennessee Home Buyers LLC at (865) 935-8680.

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