Houses and other property can be sold while someone is in bankruptcy, but there are specific rules that must be followed when you do it. You must get court approval before the property is sold. Until a final decree has been issued in a bankruptcy filing, the property will be tied up. The final decree may not have been issued even though the bankruptcy debtor has received a bankruptcy discharge. Permission from the bankruptcy court must be sought even if the secured lender, usually a mortgage company, has filed a motion for relief from the automatic stay. If relief from the automatic stay was granted by the bankruptcy court it means that the creditor can force its rights under the state law, but the property is still controlled by the bankruptcy laws for all other people, including the debtor.

In most cases, a bankruptcy will usually delay any foreclosure process. This is because when a bankruptcy case is filed, a restraining order is entered under 11 USC 362 called the automatic stay, which prevents any further debt collection efforts against debtors or their property. So if someone is facing foreclosure, a bankruptcy will immediately freeze the process. This may be permanent, as in most Chapter 13 cases, or it may be temporary, as in most Chapter 7 cases. The reason most Chapter 7 restraining orders are not permanent is due to the fact most Chapter 7 cases are over within four months time, and or, the lender will file a motion for

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