Your borrower filed for bankruptcy. The automatic stay kicked in. Your foreclosure stopped cold.
And now you are wondering if you are permanently stuck.
You are not. TrustedNoteBuyer.com buys notes in bankruptcy across all 50 states. We buy them at every stage of the bankruptcy process. And we pay cash — fast.
You do not have to wait years for a bankruptcy to resolve. You do not have to fund complex creditor proceedings. You do not have to carry the risk of a situation that may never fully recover.
You can sell now. Get your cash. Walk away clean.
Bankruptcy does not make your note unsellable
This is the most important thing to understand. A borrower bankruptcy does not eliminate the value of your note. It does not prevent a sale. And it does not mean you are out of options.
Your note is your asset. The bankruptcy belongs to the borrower — not to you. Your right to sell the note is completely unaffected by the borrower’s bankruptcy filing. You can transfer the note to a buyer at any point during the proceedings — including while the automatic stay is fully in effect.
TrustedNoteBuyer.com steps into your position as a creditor. We take over every responsibility — the legal proceedings, the stay relief motions, the creditor meetings, and the ultimate resolution. You receive cash at closing and have zero further involvement.
We buy notes at every bankruptcy stage
Some buyers only purchase notes in early-stage bankruptcy situations. We do not have that limitation.
We buy notes where the borrower just filed and the automatic stay just went into effect. We buy notes deep in a Chapter 13 repayment plan — two or three years into a five-year process. We buy notes where the borrower filed Chapter 7 and the case is moving toward discharge. And we buy notes complicated by contested creditor claims or additional legal proceedings.
The stage of the bankruptcy affects pricing. However, it does not prevent a sale. Therefore, no matter where the borrower’s case currently stands, we want to hear from you.
Why selling beats waiting out the bankruptcy
Most note holders consider waiting. They hope the bankruptcy resolves quickly. They hope the borrower cures the default. They hope the situation improves on its own.
Sometimes it does. However, most of the time — it does not. And waiting has real costs.
Your foreclosure is frozen
The automatic stay halts your foreclosure immediately. You cannot pursue collection. You cannot contact the borrower about the debt. You cannot initiate new legal action against the property. Your options are completely frozen until the stay lifts or the case concludes.
Selling the note transfers every one of those frozen obligations to us. We take over your creditor position. We navigate the stay. We manage the proceedings. You receive cash — immediately at closing.
Legal costs accumulate fast
Participating as a creditor in a bankruptcy is expensive. Proof of claim filings, creditor meetings, plan confirmation hearings, and motions for relief from stay all require specialized legal representation. Those fees accumulate throughout the entire case — which can stretch three to five years in a Chapter 13 situation.
Selling eliminates every one of those future costs immediately. We fund all proceedings going forward. You walk away with cash and no further legal bills.
The outcome is not guaranteed
Even after the bankruptcy concludes, recovery is not certain. A Chapter 13 plan may modify your note terms. A Chapter 7 discharge eliminates the borrower’s personal liability — leaving you entirely dependent on the collateral. And the property may have deteriorated significantly during years of proceedings.
Selling converts that uncertain future into a guaranteed cash payment today. That certainty is worth a great deal.
Collateral value may be declining
A borrower in bankruptcy often cannot maintain the property. Deferred maintenance, neglect, and vacancy reduce collateral value over time. Furthermore, every month the case drags on, the property securing your note may be worth less.
Selling now locks in today’s collateral value. Waiting risks losing more.
The three bankruptcy types — and how we handle each
Chapter 7 — liquidation bankruptcy
Chapter 7 is the fastest bankruptcy type. It typically concludes in three to six months. The borrower’s non-exempt assets are liquidated to satisfy creditors. For note holders, Chapter 7 often produces the quickest resolution path.
We buy Chapter 7 notes regularly. The shorter timeline and defined process make them more straightforward to evaluate. If the borrower has equity in the property, they may cooperate with a sale or refinance. If they do not, foreclosure can resume relatively quickly after the case concludes.
Chapter 7 notes typically receive stronger offers than Chapter 13 notes. The timeline is shorter. The process is more predictable. Consequently, the discount is smaller.
Chapter 13 — reorganization bankruptcy
Chapter 13 is the most common bankruptcy type note holders encounter. The borrower proposes a three to five year repayment plan to catch up on missed payments. If the court approves the plan and the borrower completes it, they keep the property.
However, borrowers frequently fail to complete their plans. When that happens, the foreclosure restarts after the bankruptcy concludes — adding years to the overall resolution timeline.
We buy Chapter 13 notes across all 50 states. The offer reflects the longer timeline and additional complexity. However, a note with a strong LTV retains real value even deep in a Chapter 13 case. Therefore, do not assume your note is unsellable just because the borrower is in a multi-year repayment plan.
Chapter 11 — business reorganization
Chapter 11 is typically used by businesses and commercial borrowers. It is a reorganization bankruptcy — similar to Chapter 13 but more complex and often longer.
We buy commercial notes in Chapter 11 situations. However, the evaluation process is more detailed. Expect a more thorough initial review and a more conservative offer that reflects the additional complexity and uncertainty involved.
The sale process — step by step
Step 1 — Contact us and disclose the bankruptcy immediately
Reach out to TrustedNoteBuyer.com. Share the property address, unpaid principal balance, original loan terms, and current payment status. Most importantly — tell us about the bankruptcy right away.
Include the chapter filed, the filing date, the case number, and the current status. Attach copies of the bankruptcy petition, the automatic stay notice, any proof of claim filed, and any court orders related to your note.
Never conceal a bankruptcy filing. It is always discovered during due diligence. Failing to disclose upfront kills transactions. Transparency upfront keeps everything moving.
Step 2 — Receive your cash offer
After reviewing your note details and bankruptcy documents, we present a written cash offer within two to three business days. The offer reflects the bankruptcy chapter, the LTV, the property type, and the state.
There is no obligation to accept. There are no fees at any stage.
Step 3 — Accept and enter due diligence
Once you accept, due diligence begins immediately. We review your documents in detail. We confirm the LTV, verify the lien position, and assess the bankruptcy proceedings. Due diligence typically takes one to two weeks with complete documentation.
Step 4 — Coordinate with your bankruptcy attorney
This step is specific to bankruptcy note sales. Notify your bankruptcy attorney immediately after accepting the offer. They need to prepare the documents transferring your creditor position to us.
This is a standard legal procedure. However, it requires coordination between both legal teams. Therefore, the sooner your attorney is informed, the faster the process moves.
Step 5 — Close and collect your cash
Closing is handled through a licensed title company or escrow agent. You sign the transfer documents. We fund the transaction. Your cash is wired directly to your bank account on closing day.
After closing, we take over your creditor position entirely. We manage every proceeding going forward. You walk away with cash and zero further obligations.
The entire process takes two to four weeks in most cases. Complex situations may take a few additional days.
What if the bankruptcy resolves during the sale?
Sometimes a bankruptcy case resolves while your transaction is in process. Here is what each outcome means.
A dismissal means the case was thrown out — typically because the borrower failed to meet their obligations. The automatic stay lifts immediately. Foreclosure can resume. This is positive news. Notify us right away — it may strengthen your offer.
A discharge means the borrower’s debts were formally eliminated. In Chapter 7, this happens three to four months after filing. Foreclosure can resume against the property after discharge — even though personal liability is eliminated. Notify us immediately if a discharge occurs.
Either outcome improves the resolution timeline. Therefore, communicate any changes in bankruptcy status to us promptly throughout the process.
We buy bankruptcy note portfolios too
Holding multiple notes in bankruptcy? Or a mixed portfolio of performing, non-performing, foreclosure, and bankruptcy notes?
You can sell them all in a single transaction.
TrustedNoteBuyer.com purchases note portfolios of all sizes and all statuses. We buy bankruptcy notes alongside performing and non-performing notes in one closing. We handle all property types. And we work across all 50 states.
Portfolio sales close everything simultaneously. You deal with one buyer through one process. And you free up all of your capital at once.
Frequently asked questions
Can I sell my note while the automatic stay is in effect?
Yes. The automatic stay restricts collection activity against the borrower. It does not prevent you from selling the note itself. You can transfer the note to us at any point — including while the stay is fully active.
Does selling the note require court approval?
In most cases, no. The note sale itself does not require court approval. However, we will need to file for relief from the automatic stay before resuming foreclosure after the purchase.
Will I receive less because of the bankruptcy?
Bankruptcy adds complexity and extends the timeline. Both factors affect the offer. However, a strong LTV protects significant value even in bankruptcy. The discount reflects complexity — not a total loss of value.
Which bankruptcy chapter produces the best offer?
Chapter 7 typically produces stronger offers. The timeline is shorter and the process is more defined. Chapter 13 and Chapter 11 notes receive deeper discounts due to longer timelines and additional complexity.
Do I need a bankruptcy attorney to sell?
You do not need an attorney to sell the note. However, your existing bankruptcy attorney must be informed so they can transfer your creditor position to us at closing.
Does TrustedNoteBuyer.com buy bankruptcy notes in all 50 states?
Yes. We purchase notes in bankruptcy across all 50 states — single notes and portfolios, all property types, all bankruptcy chapters.
The bottom line
A borrower bankruptcy does not mean you are stuck. It means the situation is more complex. And complex situations are exactly what we are built to handle.
TrustedNoteBuyer.com buys notes in bankruptcy across all 50 states. We pay cash. We close fast. And we take every legal complexity off your hands from the moment the sale closes.
No fees. No brokers. No obligation.
Ready to sell your bankruptcy note? Get your free offer at TrustedNoteBuyer.com today.