How Long After Chapter 13 Can I Sell My House in Hawaii? (2026 Guide)

Yes, you can sell your house during or after Chapter 13 bankruptcy in Hawai’i — but the process and timeline depend on where you are in your case. If you are currently in an active Chapter 13 repayment plan, you will need approval from both the U.S. Bankruptcy Court for the District of Hawai’i and your assigned bankruptcy trustee before selling, under 11 U.S.C. § 363. If your Chapter 13 plan has already been discharged, you are free to sell immediately — though the bankruptcy will remain on your credit report for up to 7 years, affecting your ability to purchase a new home. This comprehensive 2026 guide covers everything Hawai’i homeowners need to know about selling property during and after Chapter 13 bankruptcy, including Hawai’i-specific laws, court procedures, homestead exemptions, and how a cash sale can simplify the process.

Table of Contents

• What Is Chapter 13 Bankruptcy?
• Chapter 13 vs. Chapter 7: How Each Affects Selling Your Home in Hawai’i
• Can You Sell Your House During Chapter 13 in Hawai’i?
• The Motion to Sell: How to Get Court Approval
• How Sale Proceeds Are Distributed During Chapter 13
• Hawai’i’s Homestead Exemption: Protecting Your Equity
• The Automatic Stay: How It Stops Foreclosure
• Selling Your House After Chapter 13 Discharge
• Credit Recovery After Chapter 13: When Can You Buy Again?
• Capital Gains Exclusion and Bankruptcy
• Why Selling to a Cash Buyer Makes Sense During Bankruptcy
• Frequently Asked Questions

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy — sometimes called a “wage earner’s plan” — allows individuals with regular income to create a court-supervised repayment plan to pay off all or part of their debts over 3 to 5 years. Unlike Chapter 7 bankruptcy, which liquidates assets to pay creditors, Chapter 13 lets you keep your property (including your home) while catching up on missed payments through the plan.

Chapter 13 is filed under 11 U.S.C. §§ 1301-1330 and is administered through the U.S. Bankruptcy Court. In Hawai’i, all bankruptcy cases are handled by the U.S. Bankruptcy Court for the District of Hawai’i, located at 1132 Bishop Street in Honolulu. According to U.S. Courts data, Hawai’i typically sees between 500-800 Chapter 13 filings per year.

To qualify for Chapter 13, you must have:

• Regular income sufficient to fund a repayment plan
• Unsecured debts below $2,750,000 (as adjusted by the Bankruptcy Threshold Adjustment and Technical Corrections Act)
• Filed all required tax returns for the prior 4 years
• Completed credit counseling within 180 days before filing

For Hawai’i homeowners, Chapter 13 is particularly important because it provides a way to catch up on missed mortgage payments while keeping your home — something Chapter 7 cannot do. Given Hawai’i’s high property values (median home price near $900,000 according to Redfin, Q1 2026), protecting your home equity through Chapter 13 can be especially valuable.

Chapter 13 vs. Chapter 7: How Each Affects Selling Your Home in Hawai’i

Understanding the difference between Chapter 13 and Chapter 7 is critical for Hawai’i homeowners considering a property sale. Each chapter treats your home — and your ability to sell it — very differently.

Factor	Chapter 13	Chapter 7
Keep your home?	Yes — catch up on missed payments through plan	Only if equity is fully exempt
Duration	3-5 years (repayment plan)	3-6 months (liquidation)
Can you sell during?	Yes — with court and trustee approval	Only with trustee approval; trustee may sell for you
Who controls the sale?	You (debtor) — with court oversight	Trustee — may sell your home to pay creditors
Sale proceeds	Distributed per plan; exempt equity protected	Non-exempt equity goes to creditors
Credit report impact	Stays on report 7 years from filing	Stays on report 10 years from filing
Hawai’i homestead exemption	Protects up to $30,000 equity (HRS § 651-92)	Same — but non-exempt equity may be liquidated
Best for Hawai’i homeowners who…	Want to keep home or sell on their terms	Have little equity or are willing to lose the home

Why this matters in Hawai’i: Hawai’i’s homestead exemption under HRS § 651-92 protects only $30,000 in equity for a head of household ($20,000 for individuals). With Hawai’i’s high property values, most homeowners have far more than $30,000 in equity. In a Chapter 7 filing, this means a trustee could force the sale of your home to access the non-exempt equity for creditors. Chapter 13 avoids this risk by allowing you to keep your home and repay creditors over time.

This is why many Hawai’i bankruptcy attorneys recommend Chapter 13 over Chapter 7 for homeowners with significant equity — it protects your home while you get back on your feet.

Can You Sell Your House During Chapter 13 in Hawai’i?

Yes, you can sell your house while in an active Chapter 13 plan — but you cannot do it without court approval. Under 11 U.S.C. § 363(b), any sale of property outside the ordinary course of business requires notice to interested parties and court authorization. Selling your home is considered outside the ordinary course of business.

Here is the step-by-step process for selling your home during an active Chapter 13 case in the District of Hawai’i:

Step 1: Consult Your Bankruptcy Attorney

Before doing anything, talk to your bankruptcy attorney about your intent to sell. They will advise you on how the sale will affect your repayment plan, what proceeds you may be entitled to keep, and whether the sale makes financial sense. If you filed without an attorney (pro se), the U.S. Bankruptcy Court for the District of Hawai’i has a self-help center that can provide procedural guidance.

Step 2: Get a Purchase Offer

You’ll need an actual purchase agreement or letter of intent to include with your motion. This is where selling to a cash buyer like Hawaii Property Buyers has a significant advantage — we can provide a written cash offer within 24 hours, giving you the documentation you need to move the process forward quickly.

Step 3: File a Motion to Sell

Your attorney files a Motion to Sell Real Property with the bankruptcy court. This motion must include:

• A description of the property and its current value
• The proposed sale price and terms
• The identity of the buyer
• A proposed distribution of sale proceeds (mortgage payoff, trustee fees, exempt equity, creditor payments)
• How the sale affects your existing repayment plan

Step 4: Notice to All Parties

The court requires that all interested parties — including creditors, the Chapter 13 trustee, and any co-debtors — receive notice of the proposed sale. There is typically a 21-day notice period for objections.

Step 5: Trustee Review

The Chapter 13 trustee assigned to your case will review the proposed sale to ensure it is in the best interest of all parties. The trustee will evaluate whether the sale price is fair and how proceeds should be distributed. In Hawai’i, the Office of the Chapter 13 Standing Trustee works closely with the court to process these motions.

Step 6: Court Hearing and Approval

If there are no objections, the court may approve the sale without a hearing (on the papers). If objections are filed, a hearing will be scheduled. Once the court enters an order approving the sale, you can proceed to closing.

Step 7: Close the Sale

After court approval, the sale can close. Proceeds are distributed as outlined in the court order. The entire process — from filing the motion to closing — typically takes 30-60 days, depending on whether objections are filed.

The Motion to Sell: How to Get Court Approval

The Motion to Sell is the single most important document in the process of selling your home during Chapter 13. Here is what the U.S. Bankruptcy Court for the District of Hawai’i requires:

The motion must demonstrate:

• Sound business reason: Why selling is necessary or beneficial (e.g., cannot maintain mortgage payments, relocating, property is a financial burden)
• Fair price: Evidence that the sale price reflects fair market value. A comparative market analysis (CMA) or appraisal is helpful but not always required
• Good faith: The sale is an arm’s-length transaction between unrelated parties (under 11 U.S.C. § 363(m))
• Proceeds distribution: A detailed accounting of how proceeds will be used (mortgage payoff, closing costs, trustee fees, exempt equity, plan modification)

Common reasons courts approve home sales during Chapter 13:

• The homeowner can no longer afford the property
• The property needs significant repairs the owner cannot fund (common in Hawai’i due to termite damage, salt air corrosion, and aging construction)
• The owner is relocating (including military PCS from Joint Base Pearl Harbor-Hickam, Schofield Barracks, or Marine Corps Base Hawai’i)
• Selling will generate proceeds that allow the debtor to pay more to creditors than the current plan
• Divorce or family changes requiring the sale

What can cause the court to deny the sale:

• The sale price is significantly below market value
• The buyer is a family member or insider (raising good-faith concerns)
• The sale would harm creditors compared to the existing plan
• Required parties were not properly notified

How Sale Proceeds Are Distributed During Chapter 13

When you sell your home during an active Chapter 13 case, the proceeds do not simply go into your pocket. The bankruptcy court determines how the money is distributed based on legal priorities and your repayment plan. Here is the typical order of distribution:

1. Mortgage payoff: The outstanding balance on your mortgage(s) is paid first, including any arrears that were being cured through the Chapter 13 plan
2. Closing costs: Standard closing costs including title insurance, escrow fees, recording fees, and any real property taxes due
3. Real estate commissions: If applicable (not applicable when selling to a cash buyer like Hawaii Property Buyers — we charge no commissions)
4. Trustee administrative costs: The Chapter 13 trustee may receive a percentage of the sale proceeds as an administrative fee
5. Exempt equity: Under Hawai’i’s homestead exemption (HRS § 651-92), you can protect up to $30,000 of your home equity (head of household) from creditors
6. Creditor payments: Any remaining non-exempt proceeds may be applied to your unsecured creditors through a modified repayment plan

Impact on your repayment plan: Selling your home during Chapter 13 will almost certainly require a plan modification. Your attorney will file a modified plan showing how the sale proceeds affect your payments. In some cases, a successful sale can allow you to pay off your plan early (completing the case). In others, the sale proceeds may increase the total amount paid to creditors, while reducing your monthly plan payment because you no longer have a mortgage arrears cure.

Hawai’i’s Homestead Exemption: Protecting Your Equity

Hawai’i’s homestead exemption is a critical protection for homeowners in bankruptcy. Under HRS § 651-92, Hawai’i law allows you to protect a portion of your home equity from creditors:

• Head of household: Up to $30,000 in equity is exempt
• Individual (not head of household): Up to $20,000 in equity is exempt

Important: Hawai’i vs. Federal Exemptions. Hawai’i is one of the states that allows debtors to choose between state exemptions and the federal bankruptcy exemptions under 11 U.S.C. § 522(d). The federal homestead exemption is currently $27,900 (as adjusted for inflation). In most cases, Hawai’i’s $30,000 state exemption for heads of household is slightly more generous — but your bankruptcy attorney can advise on which election is best for your situation.

How the homestead exemption works during a sale: When your home is sold during Chapter 13, the exempt portion of your equity is protected. For example:

Given Hawai’i’s exceptionally high property values, the $30,000 exemption protects a relatively small percentage of most homeowners’ equity. This is one of the reasons it is critical to work with an experienced Hawai’i bankruptcy attorney who can maximize your protections and structure the sale to preserve as much of your equity as legally possible.

The Automatic Stay: How It Stops Foreclosure

One of the most powerful tools in Chapter 13 bankruptcy is the automatic stay — an immediate court order that stops virtually all collection actions against you the moment your case is filed. Under 11 U.S.C. § 362, the automatic stay:

• Stops foreclosure proceedings — Even if your lender has already filed a foreclosure complaint in Hawai’i Circuit Court under HRS Chapter 667, filing Chapter 13 halts the process
• Stops the foreclosure auction — If a sale date has been set, the automatic stay postpones it
• Stops wage garnishments and bank levies
• Stops creditor lawsuits and collection calls

How this helps Hawai’i homeowners: If you are facing foreclosure and need time to sell your home, filing Chapter 13 can buy you that time. Once the automatic stay is in place, you can work with a cash buyer to arrange a sale without the pressure of an impending foreclosure auction. Hawai’i already has one of the longest foreclosure timelines in the nation — averaging 1,764 days according to ATTOM Data Solutions — but the automatic stay provides additional certainty by freezing the process.

Limitations of the automatic stay:

• If you have filed multiple bankruptcy cases within a year, the automatic stay may be limited to 30 days (for a second filing) or may not go into effect at all (for a third or subsequent filing) under 11 U.S.C. § 362(c)(3)-(4)
• Creditors can file a Motion for Relief from Stay asking the court to allow them to proceed with foreclosure. The court will grant this if you are not making current mortgage payments and the property is declining in value
• The stay does not eliminate your debt — it provides time for you to propose a repayment plan or arrange a sale

Selling Your House After Chapter 13 Discharge

Once your Chapter 13 plan is completed and you receive your discharge, you are completely free to sell your property without any court approval or trustee involvement. The discharge typically comes after 3-5 years of successful plan payments, and it releases you from all remaining eligible debts included in the plan.

Selling after discharge is straightforward — you sell like any other homeowner. However, there are a few things to be aware of:

• Title issues: Make sure the bankruptcy case is fully closed (not just discharged). Check that no liens related to the bankruptcy remain on the property. Your attorney can verify this with the court.
• Title search: Buyers and title companies will see the bankruptcy in public records during a title search. This does not prevent the sale, but you should have your discharge papers readily available.
• Credit impact: Your credit score may still reflect the bankruptcy filing, which does not affect your right to sell but may matter if you plan to purchase a new home (see the credit recovery section below).

If your Chapter 13 was dismissed (not discharged): Dismissal means you did not complete the plan. In this case, you are also free to sell — but your debts are not discharged, meaning creditors can resume collection activities. If you have liens on the property that were being paid through the plan, they may still need to be satisfied at closing.

Credit Recovery After Chapter 13: When Can You Buy Again?

Many Hawai’i homeowners who sell during or after Chapter 13 plan to eventually buy another home. Here are the waiting periods for major mortgage programs after Chapter 13:

Mortgage Type	During Active Ch. 13	After Ch. 13 Discharge	After Ch. 13 Dismissal
FHA Loan	Eligible after 1 year of on-time plan payments (with court approval)	2 years after discharge	2 years after dismissal
VA Loan	Eligible after 1 year of on-time plan payments (with court approval)	2 years after discharge	2 years after dismissal
USDA Loan	Eligible after 1 year of on-time plan payments (with court approval)	3 years after discharge	3 years after dismissal
Conventional (Fannie/Freddie)	Not eligible during active plan	2 years after discharge; 4 years after dismissal	4 years after dismissal
Jumbo Loan	Varies by lender — typically not available	4-7 years (lender discretion)	4-7 years (lender discretion)

Note for military families in Hawai’i: VA loans offer some of the most favorable terms for purchasing after bankruptcy. If you are active duty or a veteran stationed at Joint Base Pearl Harbor-Hickam, Schofield Barracks, Marine Corps Base Hawai’i, or any of O’ahu’s military installations, you may be eligible for a VA loan with a shorter waiting period than conventional financing. The VA also does not require a minimum credit score, though individual lenders typically require a 580-620 minimum.

Credit score recovery timeline: Chapter 13 bankruptcy stays on your credit report for 7 years from the filing date (compared to 10 years for Chapter 7). However, your credit score can begin recovering much sooner:

• Year 1-2: Secured credit cards, credit-builder loans, and consistent on-time payments can raise your score to the 580-620 range
• Year 2-3: With disciplined credit management, many borrowers reach 640-680
• Year 3-5: FHA and VA qualification becomes realistic for most borrowers
• Year 5-7: Credit scores can approach pre-bankruptcy levels with good habits

Capital Gains Exclusion and Bankruptcy

Yes, the capital gains tax exclusion under IRC § 121 still applies when you sell your home during or after Chapter 13 bankruptcy. Filing bankruptcy does not affect your eligibility for the exclusion.

The standard exclusion allows you to exclude up to:

• $250,000 in capital gains (single filers)
• $500,000 in capital gains (married filing jointly)

To qualify, you must have:

• Owned the home for at least 2 of the last 5 years
• Used it as your primary residence for at least 2 of the last 5 years
• Not used the exclusion on another home sale within the last 2 years

This is especially important in Hawai’i, where significant appreciation is common. If you purchased your home in Honolulu for $650,000 in 2019 and it is now worth $900,000, your $250,000 gain would be fully excluded from capital gains tax under the ownership and use tests — regardless of whether you are in bankruptcy.

However, be aware that any taxable gain (above the exclusion amount) may be considered income by the bankruptcy court and could affect your repayment plan. Consult your bankruptcy attorney and a tax professional for guidance specific to your situation. Additionally, HARPTA (HRS § 235-68) may apply if you are selling as a non-resident of Hawai’i — requiring the buyer to withhold 7.25% of the gross sales price for Hawai’i income tax.

Why Selling to a Cash Buyer Makes Sense During Bankruptcy

Selling a home during Chapter 13 is already complex — adding the uncertainty of a traditional sale with financing contingencies, inspections, and potential deal failures makes it even harder. Here is why Hawai’i homeowners in bankruptcy often choose to sell to a cash buyer like Hawaii Property Buyers:

• Speed: Once the court approves the sale, we can close in 7-14 days. A traditional financed sale takes 30-60 days after acceptance — and the court approval process adds another 30-60 days on top of that
• Certainty: Cash sales do not fall through due to financing denials, appraisal shortfalls, or buyer cold feet. According to NAR data, approximately 15-20% of traditional sales fall through before closing
• Written offer for the court: We provide a firm written offer within 24 hours, which you can attach to your Motion to Sell — this shows the court a concrete, ready buyer
• No commissions or fees: We pay all closing costs and charge no commissions, maximizing the proceeds available for your plan and creditors
• As-is purchase: We buy in any condition — no repairs needed, no inspection contingencies that could derail the sale
• Simplified closing: Fewer contingencies means less paperwork for your attorney to review and less likelihood of objections from the trustee or creditors

For a homeowner in Chapter 13, the last thing you need is a sale that falls apart after months of court proceedings. A cash sale provides the certainty that both the bankruptcy court and your creditors want to see.

Frequently Asked Questions

Can I sell my house during an active Chapter 13 in Hawai’i?

Yes. You must file a Motion to Sell Real Property with the U.S. Bankruptcy Court for the District of Hawai’i and get approval from both the court and your Chapter 13 trustee. Under 11 U.S.C. § 363(b), the sale must be in the best interest of all parties involved. The approval process typically takes 30-60 days.

How long after Chapter 13 discharge can I sell my house?

You can sell immediately after receiving your Chapter 13 discharge. Once discharged, you have full control of your property and do not need court or trustee approval to sell. The discharge means your case is complete and your eligible debts are resolved.

What is the Hawai’i homestead exemption for bankruptcy?

Under HRS § 651-92, Hawai’i allows a homestead exemption of up to $30,000 for a head of household and $20,000 for individuals. This equity is protected from creditors during bankruptcy. Hawai’i also allows debtors to choose the federal exemption of $27,900 under 11 U.S.C. § 522(d) if it is more favorable.

Does the automatic stay stop foreclosure in Hawai’i?

Yes. Filing Chapter 13 triggers an automatic stay under 11 U.S.C. § 362 that immediately halts all foreclosure proceedings, including any foreclosure lawsuit filed in Hawai’i Circuit Court under HRS Chapter 667. This gives you time to catch up on payments or arrange a sale.

What happens to the money from selling my house during Chapter 13?

Sale proceeds are distributed in a specific order: mortgage payoff first, then closing costs, trustee administrative fees, your exempt equity (up to $30,000 under HRS § 651-92), and finally any non-exempt proceeds go to your creditors through a modified repayment plan.

Can the bankruptcy trustee force me to sell my house in Chapter 13?

In Chapter 13, the trustee generally cannot force you to sell your home — that is a Chapter 7 risk. Chapter 13 is designed to let you keep your property while repaying debts over time. However, if you cannot maintain your current mortgage payments and plan obligations, the trustee may recommend case conversion to Chapter 7 or dismissal, which could put your home at risk.

How long does it take to get court approval to sell during Chapter 13?

In the District of Hawai’i, the Motion to Sell process typically takes 30-60 days from filing to court order. This includes a 21-day notice period for objections and time for the court to review the motion. If objections are filed, additional time may be needed for a hearing.

Will I owe capital gains tax if I sell my house during Chapter 13?

Not if you qualify for the IRC § 121 exclusion. You can exclude up to $250,000 ($500,000 for married couples) in capital gains if you lived in the home for at least 2 of the last 5 years. Bankruptcy does not affect this exclusion. However, if you are selling as a non-resident of Hawai’i, HARPTA withholding of 7.25% may apply under HRS § 235-68.

When can I get a mortgage after Chapter 13 to buy a new home?

FHA and VA loans allow applications after just 1 year of on-time plan payments during an active Chapter 13 (with court approval). After discharge, the waiting period is 2 years for FHA/VA, 2-4 years for conventional loans (depending on discharge vs. dismissal), and 4-7 years for jumbo loans depending on the lender.

Is selling to a cash buyer better during Chapter 13?

In many cases, yes. A cash buyer provides a written offer that strengthens your Motion to Sell, eliminates financing contingencies that could derail the sale, and can close within 7-14 days after court approval. This certainty is valuable to the court, the trustee, and your creditors. Hawaii Property Buyers also pays all closing costs and buys in any condition, maximizing proceeds for your plan.

Can I sell my house if my Chapter 13 was dismissed?

Yes. If your Chapter 13 was dismissed (meaning you did not complete the plan), you are free to sell your property without court approval. However, dismissal means your debts are not discharged — creditors can resume collection, and any liens on the property must still be satisfied at closing.

Does filing Chapter 13 in Hawai’i affect HARPTA withholding?

Chapter 13 filing status does not directly affect HARPTA. HARPTA withholding of 7.25% under HRS § 235-68 applies based on residency status, not bankruptcy status. If you are a Hawai’i resident selling your primary home, HARPTA generally does not apply. If you are a non-resident (including military members whose domicile is another state), HARPTA withholding will apply regardless of bankruptcy status.

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Ready to Sell Your Hawai’i Home During or After Chapter 13?

If you are in Chapter 13 bankruptcy and need to sell your property, Hawaii Property Buyers can help make the process as smooth as possible. We provide a written cash offer within 24 hours — giving you the documentation you need for your Motion to Sell — and we can close in as little as 7-14 days after court approval. No commissions, no repairs, no hassle.

We understand that bankruptcy is stressful, and selling your home during a Chapter 13 case adds another layer of complexity. Our team works directly with your bankruptcy attorney to ensure the sale meets all court requirements and maximizes the benefit to you and your creditors.

Call (808) 940-3430 for a free, no-obligation cash offer on your Hawai’i property.

Related resources:

• Sell Your House in Foreclosure in Hawai’i
• How to Avoid Foreclosure in Hawai’i: 10 Proven Strategies
• Can’t Pay Your Mortgage in Hawai’i? Your Options Explained
• Understanding Foreclosure and Pre-Foreclosure in Hawai’i

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Written by Robert Koncal, owner of Hawaii Property Buyers LLC. Robert has been buying properties across Hawai’i since 2021, helping homeowners in difficult financial situations — including bankruptcy, foreclosure, and probate — sell quickly and stress-free. If you are navigating Chapter 13 and considering selling your home, Robert and his team can provide a fair cash offer and guide you through the process.