Getting Court Approval to Sell a House and Pay Off the Mortgage in Indiana

Short answer: If the house is owned by an estate, a ward, or someone subject to court supervision, you usually must petition the probate or guardianship court for authority to sell real property. The court will require notice to interested parties, evidence of value, and an order authorizing the sale and authorizing use of proceeds to pay the mortgage. Procedures and deadlines vary by the type of case (probate vs. guardianship vs. other court supervision).

Detailed answer — step‑by‑step under Indiana law

The exact process depends on why the court is involved. Common scenarios:

Probate estate administration after someone dies (personal representative/executor selling estate real property).
Guardianship/Conservatorship (guardian of the estate selling property belonging to an incapacitated person).
Receivership, bankruptcy, or a court‑ordered partition sale (different courts and rules may apply).

Most rules for probate and guardianship sales are found in Indiana’s Probate Code. See Indiana Code Title 29 (Probate) for the governing statutes and the Indiana Probate Rules for procedure: Indiana Code Title 29 (Probate) and Indiana Probate Rules.

Typical steps you will follow

Identify who has legal authority to act.

If the owner died, the personal representative named in the will (or appointed by the court if there is no will) is normally the party who petitions the court. If the owner is incapacitated, the guardian of the estate or conservator must act through the guardianship court.
Check whether court permission is required.

Some wills or statutory rules give a personal representative limited authority to sell real estate without prior court order; otherwise, you must file a petition to sell real property with the probate court. Guardians must usually obtain prior court approval before selling ward property. Consult the probate statutes and your local court rules: Probate: Estate Administration and Probate: Guardianships.
Prepare and file a petition (motion) to sell the property.

The petition typically states who you are, your authority (letters testamentary/administration or letters of guardianship), why the sale is needed, the property description, the proposed sale terms, and a request to apply proceeds to pay the mortgage and other debts. Attach the proposed purchase agreement (if any), an appraisal or market valuation, and copies of appointment documents from the court.
Give required notice.

Indiana law and local rules require notice to interested parties: heirs, beneficiaries, creditors, and sometimes the spouse. The court will specify how notice must be given and how far in advance of the hearing. Proper notice lets people object if they believe the sale is not in the estate/ward’s best interest.
Attend the court hearing.

The judge will consider evidence about value and whether the sale terms are fair and in the best interest of the estate or ward. If the judge approves, the court issues an order authorizing the sale and authorizing the personal representative or guardian to use sale proceeds to pay the mortgage, fees, and other claims.
Complete the sale and closing.

Provide the court order to the closing/title company. The title company will handle payoff of the mortgage with proceeds and obtain a mortgage satisfaction or release. Make sure you request a payoff demand from the lender so closing documents show exact amounts to be paid.
Report and account to the court.

After closing, you must usually file a closing statement or final accounting showing proceeds, mortgage payoff, costs, fees, and proposed distributions. The court will enter a final order approving the accounting and authorizing distribution.
Record documents and get mortgage release recorded.

Make sure the recorded deed and the mortgage satisfaction/release are properly recorded in the county where the property is located.

Practical details and common requirements

Get a professional appraisal or broker’s price opinion. Courts expect evidence the sale is reasonably priced.
Obtain a lender payoff demand in writing before closing; payoffs expire quickly and will affect closing figures.
Budget for court filing fees, publication/notice costs, appraisal fees, realtor commissions, and closing costs.
Expect timelines of weeks to months depending on notice periods, hearing schedules, and creditor claim periods in probate.
If a will expressly grants the personal representative the power to sell real property, the court may accept that authority but will still require proper filings and notice per probate practice.

Special issues to watch for in Indiana

Surviving spouse rights and exemptions (homestead allowances or family allowances) can affect the timing or net proceeds available for distribution. Review the probate statutes for allowances that protect surviving spouses and minor children.
If the sale is to a related party (heir, beneficiary, or guardian), the court will scrutinize the transaction more closely for fairness and may require additional disclosures or an independent appraisal.
If there are multiple owners (tenants in common), co‑owners may be able to force a partition sale through the civil courts instead of probate; that proceeds under different rules.

What documents you will typically need at filing and closing

Letters testamentary or letters of administration (proof of appointment).
Certified copy of the death certificate if applicable.
Proposed purchase agreement or an offer to purchase.
Appraisal or market analysis.
Lender payoff demand and mortgage information (loan number, lien amount).
Proposed court order authorizing sale and authorizing use of proceeds to pay mortgage and distribute net proceeds.

When to get help from a lawyer or title company

Complex estates, competing claims, or objections from heirs or creditors.
The sale involves family members or affiliated buyers where the court will look closely at fairness.
The mortgage lender resists releasing the lien without additional proof or documentation.
When you want the petition and court filings prepared correctly and efficiently to avoid delays.

Helpful hints

Start early: order an appraisal and a lender payoff demand as soon as you consider a sale.
Communicate with heirs/beneficiaries early to reduce the risk of objections at the hearing.
Bring copies of all court filings and the court order to the title company at closing so the title company can process lien payoff and record the satisfaction.
Keep careful records and receipts for all expenses paid from estate/ward funds related to the sale; you will need these for the accounting to the court.
If possible, use an experienced probate or guardianship attorney in your county to prepare the petition and proposed order — this often shortens the court’s review and minimizes technical defects.

Where to read the law and court procedure

Indiana Code — Probate (Title 29): https://iga.in.gov/legislative/laws/2023/ic/titles/29
Probate Articles (Estate administration and Guardianships): Estate administration and Guardianships
Indiana Probate Rules and procedural guidance: https://www.in.gov/judiciary/rules/probate-rules/
For local forms and county‑specific procedures, check your county clerk or probate court website through the Indiana Judicial Branch: https://www.in.gov/courts/

Disclaimer: This article provides general information about Indiana procedures for obtaining court approval to sell real estate and pay off a mortgage. It is not legal advice. Laws and court rules change, and your specific facts matter. Consult a licensed Indiana attorney for advice tailored to your situation.