You can sell a house during an active Chapter 13 in Oregon — you just can’t do it quietly. Here’s the real timeline, who actually holds the selling power, and the homestead number most articles have wrong by four times.
Yes. You can sell your house while you’re in an active Chapter 13 bankruptcy in Oregon. People are told constantly that they can’t, and it isn’t true.
What you can’t do is sell it quietly. The sale has to go through the bankruptcy court, and the rules set a floor on how fast that can happen.
Here’s the whole thing in plain language, with the statutes linked so you can check any of it.
This is the first thing people get wrong, usually because they’re thinking of Chapter 7.
In Chapter 13, 11 U.S.C. § 1303 gives the debtor the power to sell property — in the statute’s words, “exclusive of the trustee.” The selling power itself comes from § 363(b), and § 1303 is what hands it to you instead of to the trustee.
So nobody is taking your house and selling it. You sell it. You just have to ask the court first.
You file a motion. In Oregon there’s a mandatory local form for it — Local Bankruptcy Form 1302, “Notice of Motion and Motion by Chapter 13 Debtor to Use, Lease, or Dispose of Interest in Property.”
Two deadlines control your timeline, and both come from the federal rules:
Add those together and about five weeks is the realistic floor from filing the motion to a closing that can actually fund — and that assumes nobody objects and no hearing gets set.
Anyone who tells you a specific number beyond that is estimating. No Oregon court publishes average times for these motions, and I’m not going to invent one.
Form 1302 has a paragraph most sellers don’t see coming. Paragraph 7 requires that you have already conferred with the Chapter 13 trustee before filing, and that you tell the court on the face of the motion whether the trustee consents, opposes, or takes no position.
That is not the same as the trustee approving your sale — the power is still yours under § 1303. But practically, you talk to the trustee first, and what they say goes in front of the judge.
There is no statute that says “proceeds go to the plan.” What governs is the best-interests test at § 1325(a)(4): your unsecured creditors have to receive at least what they’d have gotten if you’d liquidated under Chapter 7.
In practice that means exempt proceeds are generally yours, and non-exempt equity generally has to be accounted for to creditors — often through a plan modification under § 1329. Form 1302 has checkboxes for exactly this.
If you read anywhere that Oregon’s homestead exemption is $40,000, or $50,000 for a couple, that page is out of date by roughly four times.
Oregon raised it effective January 1, 2025 and tied it to inflation. For July 1, 2026 through June 30, 2027, the exemption is $158,300 for one judgment debtor and $316,700 where two or more in the same household are liable. (ORS 18.395; Oregon Judicial Department adjustment table)
Two things that come with that number:
Oregon also has not opted out of the federal exemptions — ORS 18.300 lets you elect the federal set instead of the state set, though not both. Which one is better is a question for your attorney, not a blog.
It does not end your case. It does not convert it. It does not automatically let you finish early.
Sale proceeds can fund a plan to completion, and discharge follows completion under § 1328(a). But whether you can pay off a plan early at less than 100% to unsecured creditors is a genuinely unsettled question among courts, and I could not find controlling Oregon or Ninth Circuit authority either way.
So if somebody promises you that selling gets you out of Chapter 13 early, they are telling you something nobody actually knows.
No rule requires an appraisal. I checked § 363, Rule 6004, and Oregon’s Form 1302 — none of them ask for one, and none ask how you arrived at the price.
That is not the same as nobody caring. The trustee and any unsecured creditor can object, and price is squarely what they’d object to, because a low sale price is exactly what the § 1325(a)(4) best-interests test measures. Form 1302 also asks you to disclose your relationship to the buyer.
The practical answer: a cash sale in Chapter 13 is normal and allowed, and the motion should support the number — condition, comps, listing history, the fact that it’s as-is — even though no rule makes you.
I called a woman out in Warrenton, on the coast next to Astoria, to make a cash offer on her house.
She’d been hurt at work. Surgeries, more of them still coming, and a commute to Portland for every one. The job went away. The medical bills didn’t. Eventually that became a Chapter 13.
She’d already tried selling it about a year earlier with a Realtor. It was priced too high, it sat, and it didn’t sell. By the time I called, she was done with agents entirely and wasn’t interested in putting it back on the market herself.
So I did what I do and looked at the numbers. And the numbers said don’t take my offer.
The house didn’t need major work. That’s the whole basis of a cash discount — you’re paying me to absorb repairs, condition risk and speed. Take those away and there isn’t much left to justify the gap. A cash offer would have cleared her bankruptcy and left her with materially less than a normal sale would.
She needed a specific number to pay off the plan and start over in Washington, about six hours away. A cash close wasn’t going to get her there. A listing would.
I got the house under contract at the number she needed, and she gave me a limited power of attorney so I could manage the sale instead of her.
Then I found the best listing agent in that market and hired them. I am not a real estate broker and I did not market that house — a licensed agent did, which is the only correct way to do this. I paid for professional photography and handled the coordination.
It went on the market on a Thursday at a competitive price. About ten walk-throughs, and it was sold the following Tuesday.
Read that against the year before, when it sat with an agent at too high a price and never sold. Same house, same town, same coast. The only thing that changed was the number.
Here is the piece of this that actually matters, and I have never seen it written down.
We did not wait for court approval and then list the house. We ran the 21-day notice period in parallel with the listing.
While the house was on the market, while the buyer was doing inspections, while the appraisal was being ordered — the bankruptcy clock was already running in the background. By the time the buyer was ready, the court timeline was substantially spent instead of just starting.
If you sequence it the other way — motion first, approval, then list — you add five weeks to the front of a process that already takes a while, and you ask a seller in Chapter 13 to carry the house that much longer.
We still had to extend once, by about a week. That was it.
We also had a bankruptcy attorney and a judge who both moved. That matters more than people expect. The rules set the floor, but how fast you clear it depends on whether the people involved are on pace. A court can also shorten the notice period for cause, so the floor is not always the ceiling.
Then the appraisal came back with items on it, which is completely normal.
The seller had no money to fix them. That is the entire reason she was in Chapter 13 — a work injury, surgeries, the job gone, and medical bills that outran everything. There was nothing to go back to her with.
So I paid for the repairs myself. About a thousand dollars out of my own pocket. Not as a favor and not as a sales pitch — because the alternative was the deal dying three weeks from closing over items she physically could not fund, and her still owning that house through another coastal winter.
That is the part of this business nobody photographs. Sometimes the deal only closes because somebody writes a check that was never in the spreadsheet.
Start to finish, roughly 40 days.
Count the people at that table: the seller, her bankruptcy attorney, the judge, a listing agent, the buyer’s agent, escrow, and me. That is not a simple transaction, and anyone who tells you otherwise is selling something.
But notice what it also wasn’t. It wasn’t a distressed seller taking a lowball because she was out of options. She got a retail price on the open market, inside a bankruptcy, without running the process herself.
The honest lesson is the boring one: a cash offer is a tool, not an answer. It’s the right tool when the house needs work, when the timeline is brutal, or when there’s no capacity to manage a sale. When none of those are true — and on that house none of them were — the right answer is to say so.
I’ll tell you that on the phone too. It costs me a deal sometimes.
Be careful with any closing date inside five weeks. The rules allow a court to shorten notice for cause, but nobody should be promising you a date the court has not authorized yet.
We buy as-is and we can work on a court’s calendar rather than ours. If you’re also behind on payments or there’s a foreclosure running alongside the bankruptcy, that’s worth a conversation sooner rather than later, because those two clocks don’t wait for each other.
Oregon’s HB 4058 requires a registered residential property wholesaler to disclose in writing before you sign, and gives you three business days to cancel for any reason. I’m registered with the Oregon Real Estate Agency, #201264508, personally.
In Chapter 13 with a house you need to sell? Call and ask for Gerren — (541) 250-3067. I’ll tell you what it’s worth as-is and what a realistic timeline looks like against the court’s calendar, and you can take that to your attorney.
General information about Oregon and federal bankruptcy procedure, not legal advice. Selling a house inside a Chapter 13 case has consequences for your plan, your exemptions and your discharge, and the right answer depends on facts this article cannot know. Talk to your bankruptcy attorney before you do anything.
