By Elevation Home Partners • Updated July 1, 2026

If you are in bankruptcy, or considering it, and you also need to sell your house, it is natural to wonder whether you are even allowed to. You usually are - but bankruptcy adds a court and a trustee to the process, so there are steps to follow. Here is how it works in South Carolina.

Quick answer: You can generally sell a house during bankruptcy, but you'll need approval from the bankruptcy trustee and often the court, because the home is part of the bankruptcy estate. How it plays out depends on whether you filed Chapter 7 or Chapter 13, how much equity you have, and South Carolina's homestead exemption. Always coordinate a sale with your bankruptcy attorney.

First, the automatic stay

The moment you file bankruptcy, an automatic stay takes effect and stops most collection activity, including a foreclosure sale, at least temporarily. That breathing room is one reason people facing foreclosure consider bankruptcy. It also means that while you are in bankruptcy, you generally cannot just sell the house on your own without going through the proper channels, because the property is now part of the bankruptcy estate under the court’s oversight.

Chapter 7 (liquidation)

In Chapter 7, a trustee reviews your assets and can sell nonexempt property to pay creditors. Whether your home is at risk depends on your equity versus South Carolina’s homestead exemption:

  • South Carolina’s homestead exemption protects a set amount of home equity - currently around $63,250 for an individual and $126,475 for joint filers (these figures adjust over time).
  • If your equity is within the exemption, the trustee usually cannot sell your home to pay creditors, and after accounting for the mortgage and selling costs the trustee may simply “abandon” the property, meaning you keep it.
  • If you have more equity than the exemption covers, the trustee may sell the home, pay off the mortgage, pay you your exempt amount, and use the rest for creditors.

If you want to sell during a Chapter 7, the trustee is central to the decision, so this is coordinated closely with your attorney.

Chapter 13 (reorganization)

In Chapter 13, you keep your property and repay debts through a court-approved plan over three to five years. You can generally sell the home during the plan, but you need court approval, and the proceeds are handled according to your plan and any exemptions. Selling can even be part of a strategy, for example to resolve arrears or restructure your finances. Again, your attorney files the motion and coordinates approval.

Why equity and timing matter

The two big variables are how much equity you have and where you are in the case. A sale during bankruptcy has to account for the mortgage, any liens, the exemption, selling costs, and the trustee’s or court’s requirements. A clean, predictable sale makes all of that easier to present for approval, which is one reason a straightforward cash sale can fit these situations well.

How a cash buyer helps

We can work alongside your bankruptcy attorney and the court’s timeline, provide a clear written offer that is easy to submit for approval, buy the home as-is, and close reliably once the go-ahead is given. Because there is no financing contingency, there is less that can derail an approved sale.

Not legal advice. We buy houses; we are not attorneys or bankruptcy trustees. Selling during bankruptcy requires proper approvals, and doing it wrong can jeopardize your case. Always work with a South Carolina bankruptcy attorney before listing or accepting an offer.

If you need to sell while in bankruptcy, we are a local, family-run company buying across Greenville, Spartanburg, Anderson, and Pickens counties. We are glad to coordinate with your attorney and make the sale as simple as possible.