New York situation guide · Updated November 2026

Wholesaling Bankruptcy Properties in New York

Wholesaling bankruptcy properties in New York means contracting for a home owned by someone in a bankruptcy case, then assigning the deal to a buyer once the court or trustee allows the sale. In Yonkers, higher prices make the approvals worth the wait.

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The short answer

Can you wholesale a bankruptcy property in New York?

Sometimes. In Yonkers you can contract for a home in bankruptcy, but the sale generally needs trustee or court approval, so your contract must be conditional and your attorney must be involved from the start. Never close on a bankruptcy property without written approval from the proper authority.

When someone files bankruptcy, a federal court takes control of how their assets are handled. In Chapter 7, a trustee may sell the home. In Chapter 13, the owner keeps the home but follows a repayment plan. See our Chapter 13 and foreclosure guide for the basics.

That means the person in front of you may not be able to sign alone. Ask for the case number, the chapter and the name of the attorney. Then have your own lawyer confirm what approval is required. Read our attorney guide before you write any offer.

Bankruptcy Properties in New York at a glance

Chapters	Chapter 7 may sell assets; Chapter 13 uses a plan
Approval	Trustee or court approval is generally required
Foreclosure notice	RPAPL 1304 period may stop if the borrower files
Contract tip	Make closing conditional on approval
Home in default	Equity-purchaser law may add duties
Local market	Westchester County, Getty Square, Park Hill, Crestwood

The opportunity

Why bankruptcy sales can work in Yonkers

Yonkers sits next to New York City and has strong buyer demand for two- to four-family homes. Owners in bankruptcy often have equity but little time or cash. A trustee wants a good price quickly, and a clean offer with a ready buyer helps everyone. Few wholesalers learn the process, so the field is thin.

Real equity

Westchester prices can leave room above the debt. Check numbers with the ARV calculator.

Trustee motivation

Trustees want a sale that pays creditors. See writing a wholesale offer.

Little competition

Few investors know the approval steps. Learn more in finding motivated sellers.

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Lead sources

Where to find bankruptcy leads in Yonkers

Public court records. Federal bankruptcy filings are public, and many list the home.
Foreclosure files. Cases stalled by a filing may show in county records. See lis pendens.
Pre-foreclosure lists. Compare with pre-foreclosure and tax leads.
Attorney referrals. Bankruptcy lawyers sometimes know owners who need to sell. See joint venture wholesaling.
Direct mail. Write with care to owners facing hard times; try direct mail.

Your exit

Who buys bankruptcy homes in Yonkers

Cash buyers who understand court timelines are the best fit. They often have attorneys and can wait while approval is requested. A buyer who wants a two-family near the Metro-North line is easy to find.

Be honest about the delay. If the court rejects the deal, you may have to walk away, and your buyer should know that from day one. Our cash buyer guide explains how to build a list.

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Step by step

How to start wholesaling bankruptcy properties in New York

Ask for case details. Get the chapter, case number and attorney contact.
Hire your lawyer. Have a New York attorney confirm approval needs.
Value the house. Use the MAO calculator and comps.
Write a conditional contract. Make closing subject to approval; see assignment of contract.
Disclose your role. Tell all sides you may assign.
Present to buyers. Share the timeline and the approval risk.
Close after approval. Close with attorneys and an investor-friendly title company if used.

Your checklist for wholesaling Bankruptcy Properties in New York

Get the case number and chapter in writing.
Confirm trustee or court approval before closing.
Make every contract conditional on approval.
Have your own attorney review all documents.
Tell your buyer about possible delays.

A New York example: a Yonkers two-family in Chapter 7

Contract price	$470,000
Mortgage payoff	$318,000
Closing costs	About $24,000
Assignment fee	$15,000
Estate receives	About $128,000
Approval time	About 75 days

A Yonkers owner filed Chapter 7 after a job loss. A trustee was appointed over his two-family near Getty Square. The trustee wanted a sale that would pay creditors and the mortgage.

You wrote a contract at $470,000, conditional on court approval, and told the trustee your plan. After the mortgage and closing costs, the estate would net around $128,000.

A cash buyer took the assignment for a $15,000 fee. The court approved about 75 days later and the attorneys closed the sale.

New York rules to know

Bankruptcy and New York rules

Bankruptcy is a federal process, so a trustee or the court may need to approve a sale; confirm the exact step with your attorney. The RPAPL 1304 notice period can cease to apply when a borrower files bankruptcy, so check current text. If the home is in foreclosure or default, Real Property Law 265-a may also apply.

No New York wholesaler license statute was found, but brokerage rules can still apply if you market a house you do not control; see the license guide. For state transfer tax on the sale, see Tax Law 1402 and our transfer tax guide.

Learn it with a mentor

Navigate court timelines

Bankruptcy deals need patience and a good attorney. Mentorship students bring us case facts and we help them structure conditional contracts.

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FAQ

Bankruptcy Properties in New York: common questions

Is wholesaling bankruptcy properties in new york legal?

Assigning a contract you personally signed is typically considered lawful when all sides know your role. A bankruptcy case adds a federal layer, so a court or trustee may have to approve, and counsel in New York should guide each stage.

Can a person in bankruptcy sell their house?

Sometimes. In Chapter 7 a trustee may control the sale. In Chapter 13 the owner may sell with court permission. Ask the owner for the case details and have an attorney confirm what approval is needed. Do not accept memory of the process as proof; read the court docket.

Does bankruptcy stop a foreclosure?

It often pauses it, because a federal stay generally applies. The pause may not last forever. In New York, the RPAPL 1304 notice period can end when the borrower files. Check current text with an attorney. Lenders can ask the court to lift the stay, so timing matters.

What if the court rejects the sale?

Then the contract may fail. Write the contract so you can cancel without penalty if approval is not given, and tell your buyer about that risk before they commit funds or time. A refundable deposit is the usual way to keep trust intact.

Who pays closing costs in a bankruptcy sale?

Usually the estate or seller pays from proceeds, subject to approval. Costs can include attorney fees and state transfer tax. Confirm the full list in writing before you set your price. Court-approved sales may add a trustee commission, so ask early.