Selling or Refinancing through Bankruptcy

Real Estate Broker/Owner with NoVa Brokers LLC 0225 094634 VA/ 643686 MD


Lately, I have been receiving calls from other agents and lenders regarding how bankruptcy can help a homeowner have more time to refinance or sell their home.  So I decided to share with the group.


Well, first if there is a foreclosure date already scheduled, you can buy more time by filing a Chapter 13 Bankruptcy – which can be dismissed by the debtor at any time. (You can change your mind).  With a Chapter 7 you cannot change your mind.  Once filed, you need to follow through. Once the “Automatic Stay” is in place, you can still refinance the home or sell the home through the bankruptcy.  There are so many options with Bankruptcy.  It is still a last resort option.  But it is an option.   


I had a client who was refinancing their home, closing date and foreclosure date were in the same week.  The closing date was delayed, but of course foreclosure date was still there.  Client filed a Chapter 13 bankruptcy to stop the foreclosure and the refinance occurred.  Everyone is happy.  The same can happen if you are selling a home (not a short sale).  The difference with continuing the sale of the home through Chapter 13 bankruptcy is that the original listing agreement and contract would be void and a new one has to be prepared and approved by the bankruptcy court. 







I am not an attorney, I just work with one.  These are just my experiences, opinions and nothing more.  Please seek a lawyer if you need legal assistance.





Posted by




NoVa Brokers LLC

1483 Chain Bridge Road Suite 103

McLean, Virginia 22101

571-814-3002 OFFICE

703-999-6104 CELL

571-281-2866 FAX

Licensed in Virginia & Maryland




Comments (8)

Cynthia Tilghman, Realtor® Onslow County NC Home Specialist
Kingsbridge Realty, Inc - Hubert, NC
Hi Stella,
I will admit right up front I practically nothing about foreclosure, having never dealt with it.  So my question,if a person files for bankruptcy and cancels,  does it still show up on their credit report in any way? 
Oct 12, 2007 01:06 AM
Stella Barbour
NoVa Brokers LLC - Vienna, VA
Principal Broker, Serving Virginia and Maryland

Hi Cynthia

Yes it still shows up as a bankruptcy but it will show as a dismissed bankruptcy and should weigh less than a discharged bankruptcy.  I had one person file and dismiss the same month and it never showed up on the credit report because when they report these it was already a non issue. I have fought to remove these from the credit report and have been successful for those that filed and then dismissed.  A Chapter 7 which cannot be automatically dismissed and has to be followed through to the end stays on your credit for 10 years.  A chapter 13 stays on your credit for 7 years. 

Oct 12, 2007 01:15 AM
Debbie Malone
Londeree's Real Estate & Property Management - Lynchburg, VA
From Lynchburg To The Lake (434) 546-0369
Stella, this is great information. Most realtors don't know the process. Please post more blogs and help us out. Thanks!
Oct 31, 2007 02:25 PM
Stella Barbour
NoVa Brokers LLC - Vienna, VA
Principal Broker, Serving Virginia and Maryland

Thanks Debbie for your comment.

Nov 01, 2007 01:22 AM
Lynn Pineda
eXp Realty - Boca Raton, FL
Real Estate Promises delivered in SE Florida
Stella, this is good info where you're noting the difference whether it's a Chapter 7 or a Chapter 13. I do think that a lot of people get the wrong idea in thinking a Bankruptcy will stop a foreclosure.
Nov 02, 2007 04:52 AM
Stella Barbour
NoVa Brokers LLC - Vienna, VA
Principal Broker, Serving Virginia and Maryland
Lynn - Thanks for visiting my post and your comment.  There are just so many options for people that they might not be aware of.
Nov 02, 2007 01:42 PM


Hi Stella Barbour,

Thank you for taking the time to inform others on bankruptcy. My ex-wife just filed chapter 13. She is eager to get her finances in order and I am sorry to say that most of her problems are from our divorce six years ago.  Anyway!

 She has a private loan at 10%, a baloon payment in approximately 9 months and is scared no one will re-finance her because of her bankruptcy. The questions I have is; 

1.) How does she go about finding someone who will finance her having a bankruptcy?

2.) Should she go ahead and get started right a way on financing while the rates have gone down?

3.) Because her current mortgage is approximately 1/3 of what her home is worth, she she approach the refinance differently?

Thank you for your time and attention in this matter. I hope this might help some of your other viewers.


Jan 30, 2008 11:22 PM
Stella Barbour
NoVa Brokers LLC - Vienna, VA
Principal Broker, Serving Virginia and Maryland

Hi Melvin,


She may be able to refinance through the chapter 13 bankruptcy (almost positive we can) just a matter of when.  I have had someone recently do that because there was plenty of equity.  I have someone that may be able to get that done.  Have your former wife call me so I can get additional information from her.  I need to know more about the bankruptcy.  I am part of the bankruptcy system and I am able to look up her bankruptcy and see details so i can see what her plan payment is, what debts are included, etc. I can probably help her.  Have her e-mail me at or call me at 703-999-6104.  Does she need to be in the 13 right now.  I have to speak to her to give her an informed answer.  What district did she file?.




Jan 31, 2008 07:49 AM