Can I Sell My House After Bankruptcy in Michigan?

What Michigan Homeowners Need to Know About Selling After Bankruptcy

You made it through bankruptcy.

The stress, the paperwork, the uncertainty—it’s finally behind you. But now you’re facing a new question: What happens to my house? Whether you filed Chapter 7 or Chapter 13, many Michigan homeowners find themselves in a holding pattern after discharge, unsure of what to do next with their property.

Maybe you're trying to downsize and cut expenses. Maybe the house reminds you of a tough chapter you’d rather close for good. Or maybe keeping up with mortgage payments, taxes, or maintenance just isn’t sustainable anymore.

You're not alone. For many, selling the house after bankruptcy feels like the final step in truly starting over. And the good news is—you likely can.

The key is understanding how your bankruptcy type affects your options, what steps you still need to take, and how to move forward with confidence.

Let’s break it down.

Yes, You Have the Right to Sell After Discharge

Once your bankruptcy case is discharged and closed, you generally have the legal right to sell your home in Michigan—especially if the property was exempt or successfully retained during the process.

If you filed Chapter 7 bankruptcy, the court may have evaluated your home as a non-exempt or exempt asset. If it was exempt, it was protected from liquidation and now fully belongs to you again. Even if it was non-exempt, but the trustee abandoned the property (usually due to little or no equity), you likely regained control once the case closed.

If you filed Chapter 13 bankruptcy, you were allowed to keep the home as long as you stayed current on mortgage and plan payments. After completing your 3- to 5-year repayment plan and receiving a discharge, the home remains yours. At that point, you can generally sell it like any other homeowner.

Just be aware: selling too early—before your case is closed—can cause complications. We'll cover that in the next section. But if your bankruptcy is fully resolved, you can absolutely explore selling as a path forward.

Make Sure the Bankruptcy Case Is Fully Closed

Before listing or selling your home, it’s critical to verify that your bankruptcy case is officially closed—not just discharged. Discharge means your eligible debts were wiped out, but a case can remain open if the court or trustee is still administering certain assets or tying up procedural loose ends. This is especially common in Chapter 13 filings, where final paperwork and disbursements can delay closure even after payments end.

Selling your home before the case is closed could require court approval or trigger trustee involvement, adding unnecessary delays or complications to the sale.

You can confirm whether your case is fully closed by checking your status on the U.S. Bankruptcy Court for the Eastern District of Michigan or by contacting your bankruptcy attorney or trustee. If you’re unsure about any part of the process, double-checking now can save you serious headaches later.

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Capital Gains and Credit Recovery

Timing your home sale after bankruptcy isn’t just about legal clearance—it can also affect your financial recovery. For some homeowners, waiting a little while after discharge may help with credit score improvement, equity growth, or even capital gains considerations.

Let’s break it down:

Credit rebuilding: After discharge, your credit score may start to slowly rebound. Holding off on selling for several months can sometimes make it easier to qualify for a rental or even a future mortgage if buying again is your goal.
Home equity: If your home value is rising, waiting could also give you more room to walk away with a profit—especially if you’ve recently exited Chapter 13 and completed several years of on-time payments.
Capital gains exclusion: If the home was your primary residence for at least two of the past five years, you may qualify for the federal capital gains tax exclusion—up to $250,000 for individuals or $500,000 for married couples filing jointly. This can help you keep more of your proceeds.

To understand how bankruptcy may impact your credit timeline and financial outlook, visit Nolo’s guide to credit after bankruptcy.

Can You Use Proceeds to Buy Another Home?

After bankruptcy, many homeowners wonder if they can use the proceeds from selling their home to purchase a new one. The short answer is yes, but whether it's the right move depends on your financial readiness, housing goals, and emotional state after discharge.

Some people choose to rent temporarily—giving themselves time to rebuild credit, stabilize income, or explore new locations. Renting can offer breathing room without the pressure of another mortgage right away. Others decide to reinvest right away, especially if they’ve built up equity and feel ready for a fresh start in a more affordable or manageable property.

Either way, selling can offer a clean break from the past:

No more maintenance stress
No lingering debts tied to the house
A chance to move forward with clarity and purpose

For many Michigan homeowners, it’s not just about the money—it’s about closing one chapter and starting another on their terms.

If you’re considering downsizing, this guide on how to sell your Michigan home fast and downsize without the stress may help you explore your next steps.

"When you mentioned that you would give us an offer within 24 hours and then close quickly I didn’t really believe that we would have the house sold in only 2 weeks. I’m glad I found you.”

Michelle L. - Michigan

What If You’re Trying to Avoid Bankruptcy in the First Place?

If you're not post-bankruptcy yet—but instead trying to avoid filing in the first place—selling your house now might be the lifeline you need. For many Michigan homeowners, getting out from under a mortgage before the court gets involved can preserve credit, protect assets, and spare months (or years) of emotional stress.

Whether you're facing overwhelming debt, missed mortgage payments, or the fear of creditor harassment, a fast home sale could help you reset—without ever having to file.

Learn more about how selling your house before bankruptcy works here:
👉 Sell House Fast to Avoid Bankruptcy in Michigan

It might not be too late to find a better way out.

Selling Could Be the Fresh Start You’ve Needed

Bankruptcy was hard—but it’s behind you now. Selling your house might be the next right move to finally put the stress in the rearview mirror. Whether you want to downsize, relocate, or simply be done with the burden, you deserve a clean slate and a smooth path forward.

At Dennis Buys Houses, we work with Michigan homeowners just like you—people who’ve weathered tough seasons and are ready to move on. We’ll listen to your situation, give you honest guidance, and make a fair cash offer with no pressure and no obligations.

If you're ready to talk—or just want to explore your options—we’re here when you are. One conversation could be the start of your next chapter.

See why so many people recommend us...

“Mr. Fassett – thank you for working with us to buy my Mom’s home after she passed away. When you mentioned that you would give us an offer within 24 hours and then close quickly I didn’t really believe that we would have the house sold in only 2 weeks. I’m glad I found you.”

Michelle L. - Michigan

“Thanks for buying my Mother’s home. It was a big help that you were able to buy it without us having to clean it out and get it ready to sell. My mother had accumulated lots of stuff and after the stress of her long illness I was exhausted and I dreaded dealing with all of it. I also liked it that you gave me a very fair price for the home. I’m on a fixed income and that really helped a lot.”

Henry G. - Michigan

“Dennis – thank you for helping us with our Mom’s home. This was a very traumatic experience for us, and we appreciated your patience with all the emotions we experienced during the process. You were really patient and understanding with us during the sale process, and we’re sure that Mom’s home will be in good hands. God Bless.”

Claudia and Nancy M. - Michigan

We Help Michigan Families Navigate These Situations Every Day

Dennis sitting in a chair in his living room

At Dennis Buys Houses, we’re not just cash buyers — we’re trusted problem-solvers who help Michigan families find real answers during difficult times.

Since 2004, we've been helping homeowners across Michigan sell their properties quickly and easily—without the stress of agents, repairs, or hidden fees.

We’re a family-owned, local business with deep roots in the community. Over the years, we’ve helped hundreds and hundreds of homeowners in situations just like yours—whether they’re dealing with delinquent property taxes, foreclosure, or simply needing a fresh start.

If you're dealing with a tough family situation and don’t know where to turn, we’re here to help.

Start here:

Learn how we buy houses in Michigan: How It Works
See what makes us different: Why Choose Us
Ready to get a cash offer? Contact Us Today

Whether you’re ready to sell or just want to explore your options, we’re here for you. Call us today, and let’s talk about how we can make your situation easier.

No pressure. No judgment. Just real help when you need it.