Generally, you cannot sell or dispose of any of your property during your Chapter 13 plan. It does not matter whether the property was acquired before or after you filed the case. You must have written approval from the Trustee or the Court before you sell or dispose of your property. This includes cars and houses. Make sure you contact your attorney to discuss what you need to do to get the approval you need before you enter into any agreements to sell your property.
Any request to sell or dispose of your personal property must include:
A description of the property;
The lienholders name;
The balance of the existing note;
The amount of the expected sale; and
How the proceeds of the sale will be distributed and the effect the sale will have on the Chapter 13 plan.
As a general rule, the net proceeds from the sale of real estate must be paid to the Chapter 13 Trustee. In addition, if approval of the sale is granted, it is your responsibility to ensure that the creditor whose claim is satisfied through the sale of the property sends to the Court and the Trustee a written withdrawal of the claim. You should make sure that you send to the Trustees office a copy of the signed closing statement for any real estate sales.
If you sell or dispose of property during your Chapter 13 plan without approval of the Court or the Trustee, the Court may set aside the sale or disposition of property or may dismiss or convert your case. It is highly recommended that you work closely with your attorney when you are contemplating selling or disposing of property during your Chapter 13 plan.
[Requirements for Sale of Real Estate]