Do I need court approval to sell my house during Chapter 13?

Generally yes. Your home is property of the estate, and 11 U.S.C. § 363(b)(1) allows a sale outside the ordinary course of business only after notice and a hearing. Local rules add the procedure. In the Central District of California, a sale or refinancing of the debtor's principal residence or other real property must be approved by the court (C.D. Cal. LBR 3015-1).

What happens to my equity if I sell during Chapter 13?

Sale proceeds are estate property, and the motion typically has to state how much goes toward your confirmed plan obligations and how much, if any, is paid to you (E.D. Va. LBR 6004-3). Exemptions under 11 U.S.C. § 522 are what allow a debtor to protect value; the specific amounts come from your state's law, which you can find on your state page.

How long does approval usually take?

Plan for several weeks. Several districts require at least 21 days' notice of the motion to the Chapter 13 trustee and all creditors and parties in interest, unless the court shortens the period for cause shown (E.D. Va. LBR 6004-3; D.C. LBR 6004-2). If no objection is filed, the court may enter an order endorsed by the trustee without holding a hearing.

Can I refinance my mortgage while in Chapter 13?

Refinancing is generally possible with court approval, and some districts have a specific route. Ariz. LBR 2084-25 allows a pre-confirmation ex parte motion with the trustee's consent where the new loan only refinances existing debt on the residence, the residence is the only security, all existing liens are paid from the proceeds, and the new monthly payment does not exceed the current one.

Does selling free and clear of liens happen automatically?

No. KYEB LBR 6004-1 states that a sale of property under section 363 is not a sale free and clear of any interest unless the motion expressly requests relief under 11 U.S.C. § 363(f), the order expressly grants that relief, and any required fee is paid. This is a distinct request that has to be made in writing, not something that follows from approval of the sale.

What did it cost to file the Chapter 13 case in the first place?

The statutory filing fee for an individual or joint Chapter 13 case is $235 (28 U.S.C. § 1930(a)(1)(B)), plus a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8, effective December 1, 2023). Those are case-opening fees, separate from any costs tied to a later sale or refinance, such as fees your local rule requires for a sale free and clear.

Can I buy a home during my Chapter 13 case?

Incurring that much new debt is court-supervised. Ariz. LBR 2084-25 sets out certifications for a pre-confirmation new home loan, including that the residence is the only security and the new monthly payment will not exceed the current mortgage or rental payment. W.D. Va. LBR 6004-3 bars voluntarily incurring more than a cumulative $15,000 during the plan without court approval.

What if my buyer will not wait for the court?

That is a real risk, and it is why the approval timeline belongs in the contract from the start. Districts commonly require at least 21 days' notice, and the court can shorten that period for cause shown (E.D. Va. LBR 6004-3). Your attorney can ask for shortened notice, but the court decides whether the reason qualifies.

Chapter 13

Selling or Refinancing a Home During Chapter 13

You can generally sell or refinance a home during Chapter 13, but not on your own. Your home is property of the bankruptcy estate, and a sale outside the ordinary course of business requires notice and a hearing under 11 U.S.C. § 363(b)(1). Most districts require a written motion, 21 days' notice to the trustee and creditors, and a court order before closing.

Key points

A home you own when you file becomes property of the bankruptcy estate, so selling or refinancing it during a Chapter 13 case is a court matter, not just a real estate matter.
Under 11 U.S.C. § 363(b)(1), a sale outside the ordinary course of business happens only after notice and a hearing.
Many districts require a motion with at least 21 days' notice to the Chapter 13 trustee, creditors, and parties in interest, and let the court approve without a hearing if nobody objects.
The motion typically has to state the sale price or refinancing amount, how much goes to the confirmed plan, and how much (if any) goes back to you.
Exemptions under 11 U.S.C. § 522 are what let you keep a share of the proceeds, and those amounts are set by state law on your state's exemption page.

You may have found a buyer, or a lender willing to refinance at a rate that would make your budget work. Then someone told you that you are in Chapter 13 and cannot just sign. That is broadly right, and the reason is that your home is now part of a bankruptcy estate with a trustee and creditors attached to it. This page walks through how approval actually works, what the paperwork asks for, and where the money goes.

Why does the court have to approve a sale at all?

When you file, an estate is created and your interests in property become property of that estate. The legislative history of 11 U.S.C. § 541 puts it bluntly: once the estate is created, no interests in property of the estate remain in the debtor, and the estate captures proceeds, products, rents, and profits of estate property. Converting property into another form does not change its character as estate property, so sale proceeds are estate proceeds too.

That is why the sale is a bankruptcy question. 11 U.S.C. § 363(b)(1) provides that the trustee, after notice and a hearing, may use, sell, or lease property of the estate other than in the ordinary course of business. Selling your house is not ordinary course. Local rules then supply the mechanics: in the Central District of California, for example, a sale or refinancing of the debtor's principal residence or other real property must be approved by the court, by noticed motion (C.D. Cal. LBR 3015-1).

The home is estate property, so the trustee and creditors are parties to the transaction.
A sale outside the ordinary course requires notice and a hearing under 11 U.S.C. § 363(b)(1).
Your realtor, buyer, and title company will usually need a copy of the entered order before closing.

What changes the answer in your case?

Several facts move this in very different directions. The biggest is timing: whether you are before or after plan confirmation. Several districts write separate rules for each. Ariz. LBR 2084-25 covers pre-confirmation approval to incur new debt or refinance an existing home loan with the trustee's consent, while D.C. LBR 6004-2 governs sale of estate property by a Chapter 13 debtor after confirmation.

The second is what the transaction does to your creditors. Rules commonly ask whether the proceeds will pay all allowed claims in full, because that changes who is affected and how hard the sale is to approve. The third is whether liens have to be stripped off at closing. A sale free and clear of liens under § 363(f) is its own request; KYEB LBR 6004-1 states that a sale under section 363 is not free and clear of any interest unless the motion expressly requests that relief and the order expressly grants it.

Factors that change how a Chapter 13 home transaction is handled
Factor	Why it matters
Before or after confirmation	Districts often use separate rules and different approval routes
Sale vs. refinance vs. loan modification	Each has its own motion requirements in many local rules
Whether all allowed claims get paid in full	Notices commonly must state this directly
Liens on the property	Selling free and clear must be expressly requested and expressly granted
Whether an objection is filed	No objection often means approval without a hearing

What does federal law actually say?

Three provisions carry most of the weight. 11 U.S.C. § 363(b)(1) is the authority to sell estate property outside the ordinary course of business, after notice and a hearing. 11 U.S.C. § 541 makes your home and the proceeds of any sale property of the estate in the first place. 11 U.S.C. § 522 governs exemptions, which is the mechanism that lets a debtor protect value in a residence; it permits a debtor the exemptions available under other federal law and the law of the state of the debtor's domicile, and states may pass a law determining whether the federal exemptions are available as an alternative.

11 U.S.C. § 362 also matters while your case is open, because the automatic stay bars acts to obtain possession of, or exercise control over, property of the estate. A court order authorizing your sale is what makes the transaction an approved act rather than an unauthorized one.

11 U.S.C. § 363(b)(1) — sale of estate property outside the ordinary course, after notice and a hearing.
11 U.S.C. § 541 — the home, and the proceeds of selling it, are property of the estate.
11 U.S.C. § 522 — exemptions, drawn from state law or the federal list where a state allows it.
11 U.S.C. § 362 — the automatic stay covers acts to exercise control over estate property.

Where do local rules and state law differ?

The federal statute sets the standard; your district's local rules set the procedure, and they vary in ways that affect your closing date. E.D. Va. LBR 6004-3 requires a debtor intending to sell or refinance real property after confirmation to file a motion and give the Chapter 13 trustee and all creditors and parties in interest at least 21 days' notice, unless the court shortens it for cause. W.D. Va. LBR 6004-3 does the same and adds that the debtor shall not voluntarily incur additional debt exceeding a cumulative total of $15,000 in principal and interest during the plan term without court approval after notice.

D.C. LBR 6004-2 allows a notice of private sale in place of a motion when the sale is free and clear only of the debtor's own interests. Ariz. LBR 2084-25 permits ex parte approval pre-confirmation with the trustee's consent on specific certifications. State law drives your exemptions, which is a separate question — those amounts live on your state page.

Notice periods, forms, and whether a hearing is needed are district-specific.
Some districts allow trustee-endorsed orders with no hearing when nobody objects.
Exemption amounts come from state law and are not set by the local rules.

What does this look like in practice?

In a common post-confirmation sale, you sign a contract that is expressly subject to bankruptcy court approval. Your attorney files a motion attaching the proposed contract; W.D. Va. LBR 6004-3 requires the application to attach the proposed sale contract, refinancing agreement, or loan modification agreement at a minimum. The trustee and creditors get their notice period, commonly 21 days.

If nobody objects, the court may enter an order endorsed by the Chapter 13 trustee approving the sale or refinance without holding a hearing (E.D. Va. LBR 6004-3). If someone does object, the matter is set for hearing. At closing, the settlement agent pays liens and the amounts the order directs toward your plan obligations, and any remainder allowed to you is released. A refinance follows a parallel path; in the District of Massachusetts, a motion to approve a borrowing, refinancing, or loan modification must include all material terms of the proposed credit arrangement (D. Mass. LBR Appendix 1, Rule 13-15).

Build the approval timeline into the contract — a 21-day notice period is common.
Expect the trustee to review your payment history and plan status.
Nobody objecting is the fast path; an objection means a hearing date.

What documents and information are involved?

The notice content is where most of the real work sits, and several districts require the same four data points. Under E.D. Va. LBR 6004-3, W.D. Va. LBR 6004-3, and D.C. LBR 6004-2, the notice must state the total proposed sale price or the maximum amount to be secured by the refinancing (and, for a refinance, the existing secured debt being paid), the amount of sale or loan proceeds to be applied to your obligations under the confirmed plan, whether that payment will pay all allowed claims in full, and if not, how much of the proceeds will be paid to you.

A pre-confirmation Arizona refinance motion asks for more: certification that you are current on plan payments, that you are not in default under the plan, that Schedules I and J were filed within the prior 30 days showing ability to pay, and that the new monthly payment will not exceed your current mortgage payment (Ariz. LBR 2084-25).

Information commonly required in the motion or notice
Item	Where it comes from
Proposed sale price or maximum refinance amount	Purchase contract or loan estimate
Existing secured debt to be paid off	Payoff statements from each lienholder
Proceeds applied to confirmed plan obligations	Trustee payoff figures and the plan
Whether all allowed claims will be paid in full	Claims register and trustee accounting
Proceeds to be paid to the debtor	Settlement statement and claimed exemptions
Copy of the contract or loan agreement	Attached to the motion in many districts

Can you buy a house while your Chapter 13 case is open?

Incurring new debt during a Chapter 13 case is generally a court-supervised decision, and some districts address purchases directly. Ariz. LBR 2084-25 lets a debtor seek pre-confirmation ex parte approval to incur new debt with the trustee's consent, and for a new home loan it requires certification that the loan is a single loan incurred to purchase a residence necessary for the maintenance or support of the debtor and the debtor's family, that the residence is the only security, and that the new monthly payment including taxes, insurance, association fees, and assessments will not exceed the current mortgage or rental payment or a reasonable amount.

Other districts set dollar thresholds instead. W.D. Va. LBR 6004-3 bars voluntarily incurring additional indebtedness exceeding a cumulative $15,000 in principal and interest during the plan term without court approval. Check your own district's rule and talk to your trustee early.

Approval standards for new debt vary sharply between districts.
Trustee consent is often the practical gatekeeper, not just the court.
Lenders will usually want the entered order before they fund.

What should you ask a lawyer about your situation?

Bring the specifics, because that is what determines the answer. Ask which local rule governs in your district and whether your case is pre- or post-confirmation, since the route differs. Ask what your trustee's payoff figure is today and whether the proceeds would pay all allowed claims in full, since several notice requirements turn on that.

Ask what exemption you can claim in the proceeds under 11 U.S.C. § 522 and your state's law, and how that interacts with the plan. Ask whether the sale needs to be free and clear of liens, and whether the motion has to say so expressly (KYEB LBR 6004-1). Ask how long the notice period will run and whether your contract's closing date can absorb it. Finally, ask what happens to your plan afterward: whether it needs to be modified, and whether the case can end early.

Which local rule applies, and does confirmation status change it?
What is the trustee's current payoff, and would this pay all allowed claims?
What exemption applies to the proceeds, and does a lien need to be stripped at closing?
How long is the notice period, and does the contract allow for it?
Does the plan need to be modified after closing?

Frequently asked questions

Do I need court approval to sell my house during Chapter 13?: Generally yes. Your home is property of the estate, and 11 U.S.C. § 363(b)(1) allows a sale outside the ordinary course of business only after notice and a hearing. Local rules add the procedure. In the Central District of California, a sale or refinancing of the debtor's principal residence or other real property must be approved by the court (C.D. Cal. LBR 3015-1).
What happens to my equity if I sell during Chapter 13?: Sale proceeds are estate property, and the motion typically has to state how much goes toward your confirmed plan obligations and how much, if any, is paid to you (E.D. Va. LBR 6004-3). Exemptions under 11 U.S.C. § 522 are what allow a debtor to protect value; the specific amounts come from your state's law, which you can find on your state page.
How long does approval usually take?: Plan for several weeks. Several districts require at least 21 days' notice of the motion to the Chapter 13 trustee and all creditors and parties in interest, unless the court shortens the period for cause shown (E.D. Va. LBR 6004-3; D.C. LBR 6004-2). If no objection is filed, the court may enter an order endorsed by the trustee without holding a hearing.
Can I refinance my mortgage while in Chapter 13?: Refinancing is generally possible with court approval, and some districts have a specific route. Ariz. LBR 2084-25 allows a pre-confirmation ex parte motion with the trustee's consent where the new loan only refinances existing debt on the residence, the residence is the only security, all existing liens are paid from the proceeds, and the new monthly payment does not exceed the current one.
Does selling free and clear of liens happen automatically?: No. KYEB LBR 6004-1 states that a sale of property under section 363 is not a sale free and clear of any interest unless the motion expressly requests relief under 11 U.S.C. § 363(f), the order expressly grants that relief, and any required fee is paid. This is a distinct request that has to be made in writing, not something that follows from approval of the sale.
What did it cost to file the Chapter 13 case in the first place?: The statutory filing fee for an individual or joint Chapter 13 case is $235 (28 U.S.C. § 1930(a)(1)(B)), plus a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8, effective December 1, 2023). Those are case-opening fees, separate from any costs tied to a later sale or refinance, such as fees your local rule requires for a sale free and clear.
Can I buy a home during my Chapter 13 case?: Incurring that much new debt is court-supervised. Ariz. LBR 2084-25 sets out certifications for a pre-confirmation new home loan, including that the residence is the only security and the new monthly payment will not exceed the current mortgage or rental payment. W.D. Va. LBR 6004-3 bars voluntarily incurring more than a cumulative $15,000 during the plan without court approval.
What if my buyer will not wait for the court?: That is a real risk, and it is why the approval timeline belongs in the contract from the start. Districts commonly require at least 21 days' notice, and the court can shorten that period for cause shown (E.D. Va. LBR 6004-3). Your attorney can ask for shortened notice, but the court decides whether the reason qualifies.

Sources

11 U.S.C. § 363 — Use, sale, or lease of property · official source
11 U.S.C. § 541 — Property of the estate · official source
11 U.S.C. § 522 — Exemptions · official source
11 U.S.C. § 362 — Automatic stay · official source
E.D. Va. LBR 6004-3 — Sale or Refinance of Property by Chapter 13 Debtor After Confirmation
W.D. Va. LBR 6004-3 — Sale of Property; Refinancing; Loan Modification; and the Incurrence of Debt by Chapter 13 Debtor
D.C. LBR 6004-2 — Sale of Estate Property by Chapter 13 Debtor After Confirmation
Ariz. LBR 2084-25 — Sale of Property or Incurring New Debt
C.D. Cal. LBR 3015-1 — Chapter 13 plan administration, including sale or refinance of real property
KYEB LBR 6004-1 — Sale Free and Clear of Liens and Other Interests
D. Mass. LBR Appendix 1, Rule 13-15 — Borrowings or Refinancing of Estate Property; Loan Modification Agreements
28 U.S.C. § 1930(a)(1)(B) — Bankruptcy filing fees
Bankruptcy Court Miscellaneous Fee Schedule, Item 8 — Administrative fee

By Antonio G. Jimenez, Esq. · Florida Bar No. 21022

Last reviewed July 26, 2026 · Sources verified July 26, 2026 · How we verify

Every figure on this page is drawn from a primary legal source and checked against our canonical legal database before publication. Bankruptcy.law is not a law firm and does not provide legal advice.

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