Can we sell our house after a report of no distribution?

Since you have an attorney already, it is unlikely that another will want to give you any advice. Ordinarily, in your situation, you would not need to continue making mortgage payments. But you should ask your attorney to be sure.

The "no asset report" and the "discharge order" do not mean that the property has been returned to you from the bankruptcy estate. You must wait until the estate is closed or obtain an order of abandonment of that property from the estate to you. However, based upon the "no asset report" your attorney is correct that can safely list the property for sale but you should include the following in the listing agreement: "subject to bankruptcy court approval or closing of case". It is also reasonably safe to make payments to the lender because the "no asset report" indicates that the trustee is not planning on hiring a broker to sell the property.

You are free to sell the house.

You may list the property for sale, however, until the bankruptcy discharge is entered, the bankruptcy court still has to approve the sale to clear title. The discharge cannot be entered until 60 days after completion of the 341 meeting. If you fail to make the monthly payments to the lender, they can declare a default and start foreclosure but only after they have obtained an order from the bankruptcy court granting relief from the automatic bankruptcy stay. I would doubt they would file their motion for relief from stay, but would wait until the discharge is granted and then they can start the foreclosure process which would take three months and 20 days to the actual foreclosure sale date.

You will need to wait until the court closes the file to sell your property without court approval. With luck, you should receive the order closing case & discharging your trustee soon.

I don't know of any legal reason why you could not list the property for sale. However, there are some issues that you should consider. 1. The listing value should not be greater than the value you listed your property for in your Schedule A. If you wait until the case is closed, you have much more latitude in a listed price. 2. How volatile your market is. If sales are hot, you could expect a sale fairly quickly. However, if the property goes into the foreclosure process, buyers could sense that they have leverage and hold off making offers or submit low offers. You can prevent this situation by making payments until you have a sale. 3. If your market is moving slowly, then you should consider staying current on the property and/or setting an aggressive price (low end of the market).

The reason that the trustee didn't go for turnover of your equity in the house is because it's covered by the "homestead exemption". The homestead exemption only applies to the property that you're living in, if you sell it and cease to live in it, then the homestead exemption might no longer apply. I would advise that you wait until your case is closed to sell the house. And you'll want to pay the mortgage during that time or else the interest and penalties will probably take all your equity.

You can either move to have the home abandoned from the bankruptcy estate and then sell it, or wait until the bankruptcy closes (which is different than discharge) to sell. I would probably just wait until after closure, which will likely be within days of the discharge. You can stop making payments on the home now. However, failure to make payments will add late fees and other costs which could quickly reduce any equity you might have.