Sell The Home Before or After Bankruptcy

by L. Jed Berliner, Western & Central Massachusetts Consumer Lawyer

May 21, 2007

You’ve been downsized, you’ve incurred a terrible amount of debt, and you need to relocate for better employment. You can file bankruptcy first, or you can sell your home and purchase another home in your new location and then file. You might even want to sell and hold onto the cash, filing your bankruptcy case without purchasing another home. What to do?

Each state protects a different amount of equity, and not every state protects free cash obtained from selling a home. Making this even more complicated is that the rules on where you can file (where you’ve lived or had assets for the greater half of the 180 days before filing) are different from the rules on which state’s protections apply (where you lived for the past two years if in one state, or where you lived the greater half of the 180 days before those two years if the two years were not all in one state – Huh?).

Unfortunately, you’ll need an attorney – an attorney specialized and experienced in bankruptcy who can tell you the laws of your current home state as well as those of the new state and then help you make the best choice for your circumstances.

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L. Jed Berliner practices exclusively in consumer bankruptcy, foreclosure defense, and related consumer protection litigation such as credit card defenses and suing debt collectors. He established his Springfield, MA practice in 1988. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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Last modified: February 9, 2013