Have 2 homes with 1 rented with rent to own. can i keep both filing chapter7

People often ask if they can keep homes, second homes, cars, boats, tax refunds, etc., when they are contemplating Bankruptcy. I always tell them they can keep what they want of they can pay for it, or if the equity or value is protected by an exemption in their State! There are two types of Bankruptcy for most individuals. Chapter 7 (liquidation) and Chapter 13 (payments are made to a Chapter 13 Trustee to be distributed pursuant to a Plan you and your attorney draft). To determine of you get to keep the property you have to know two things… 1) What is the equity in the property? (I.e., what is it worth minus what you owe on it). 2) Will the exemption laws that are applied to the property protect the equity? Bankruptcy is much more concerned with equity than it is with debt. If you have no equity in a rental home the Trustee in a 7 or 13 does not have an interest in the property and you may keep it. If you owe more on the vacation home than it is worth you may be able to use Bankruptcy to reduce the amount of the debt, and again, keep it. When you have equity in something that is not protected by an exemption then that is an issue that a lawyer must evaluate. See an attorney right away before you act. Good Luck! Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship. The opinions expressed herein are those of the author only and the fact that he has worked as an Assistant District Attorney; State Supreme Court Clerk; Special Assistant United States Attorney (Hawaii); Assistant Cornell University Counsel or Judge Advocate, United States Marine Corps should not be relied upon to assume that these statements reflect the policy of these organizations.

The answer to your question depends on a variety of issues: First, is there excess equity in either home? Depending on the size of your household, you may have excess equity beyond the exemptions (remember: there are federal and state exemptions to consider). Second, are you below the median income for your household size for LA? I don't practice in Louisiana, but this will help you determine if you qualify for a Chapter 7 (below the median annual income) or you will be a Chapter 13. Both of these issues will be the first two steps in determining if you are a Chapter 7 or a Chapter 13. If you do not have excess equity in either home and you are below the means for your state, there's a good likelihood you qualify for a Chapter 7 and will be able to keep the homes.

I will add a third question to Mr. Lang's comments. It also depends on whether the rent from the second home covers the costs, including any mortgages. If you are current, there is no equity and the income covers the costs, you can usually keep the property. Consult with a Louisiana attorney about you entire situation. Bankruptcy involves analyzing state and federal law. Louisiana law is so peculiar that none of us can being to analyze it without being sworn in there. I am not. [This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]