Do Not Sell or Move Proceeds Without Legal Advice
A pre-filing sale must be disclosed and may affect exemptions or later review. During an open case, the home or its proceeds may be property of the bankruptcy estate. Ask your bankruptcy attorney what trustee involvement, notice, lender consent, court authorization, or plan modification is required before signing or transferring anything.
Kentucky Homestead Law Is Not a Complete Bankruptcy Answer
KRS 427.060 states Kentucky's homestead exemption and exceptions. Bankruptcy exemption planning can still depend on federal law, eligibility, filing date, residence history, ownership, marital status, liens, and the selected exemption system. Have counsel calculate the current protected and nonexempt amounts for your facts.
Questions for Kentucky Bankruptcy Counsel
- Is the home property of the estate, exempt, or abandoned?
- Who may market the house and sign the purchase agreement?
- Must the trustee, creditors, lender, or court receive notice or approve?
- What valuation or marketing evidence will be required?
- How will mortgages, taxes, liens, costs, exemptions, and remaining proceeds be distributed?
- May the debtor use any proceeds, and under what restrictions?
What a Direct Buyer Can—and Cannot—Do
Mortgage Forfeiture can inspect the property and prepare a written offer for the owner, attorney, trustee, and court to evaluate as appropriate. A cash contract can remove a buyer-financing contingency. It does not guarantee approval, lien treatment, exemption protection, deficiency treatment, or closing.
If the required parties authorize a sale, the title company prepares a settlement statement showing the purchase price, allocated costs, payoffs, taxes, prorations, and estimated net. No proceeds should be spent contrary to counsel's advice or a court order.
Primary Starting Points
- U.S. Courts: Chapter 7 Bankruptcy Basics
- U.S. Courts: Chapter 13 Bankruptcy Basics
- U.S. Bankruptcy Court, Western District of Kentucky
General information only; not legal, tax, credit, or financial advice. Ask qualified Kentucky bankruptcy counsel about the facts and current law in your case.