Can I File Bankruptcy If I Recently Sold My House?

Yes, you can file for bankruptcy if you have recently sold a home. You will, however, need to wait at least 90 days. You may even have to wait a bit longer depending on how much money you had received from the sale. Make sure that you discuss this with your attorney. He or she will probably ask to see a copy of the closing papers so that they can determine how long you may need to wait before filing. Usually the court will not have a problem with you selling your home so recently as long as it was not sold to an insider, such as a family member.

Also be prepared that the bankruptcy Trustee may want to know what you did with the excess money that you received from the sale of your home. Be prepared to be able to explain this. It is a good idea to keep excellent record of where this money goes. Keeping copies of bank statements and cancelled checks will help with this. The court will want to be able to see that the money was used for necessary expenses, such as food, and not on something such as a vacation or other luxury items.

If you try to file bankruptcy immediately after selling your home and you have a large amount of money in the bank, used the money to purchase non-necessities or gave it to family then you may not be able to file for bankruptcy. As always, it’s in your best bet to contact a bankruptcy lawyer in your area to see what they recommend.