If there is no equity in either property, then you can keep them in a Chapter 7 case as long as you can maintain the required mortgage and other payments on each of them. If the value of the properties is less than what is owed to the first mortgage, you might want to consider doing a Chapter 13 case to remove the junior liens (what you can do in that regard depends on the numbers and whether it is your principal residence or the rental property).
As always, a consultation with an experienced bankruptcy attorney will yield the answers you seek.
Mark Markus
has been practicing exclusively bankruptcy law in California since 1991. He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization, AV-Rated by martindale.com, and A+ rated by the Better Business Bureau.
The bankruptcy trustee will only be interested in taking property that isn't exempt and that can be sold for a profit. Although I am seeing real estate with no equity sold for the short sale cash incentive some banks are willing to pay, a clever attorney may be able to find a way to exempt both properties for you.
However, you may have another problem that hasn't occurred to you - your rental income. If the Trustee is able to take your rental income & use it to pay your unsecured debt, this may create a problem to you.
I would urge you to look for the most experienced bankruptcy attorney you can find to protect you from the many problems that I see at a quick glance in your case. Hope this perspective helps!
Peter Walter WestonBankruptcy AttorneyBellaire, TX ·
There may be way to keep two properties, with the facts in your inquiry, after an analysis by an experienced bankruptcy attorney.
You may also have the benefit of determining if you have personal liability,
All of your financial situation must be reviewed and considered before deciding what you can, or should, do.
Yes, as have been explained you by Mr. Markus you can file a chapter 7 bankruptcy and keep both pieces of properties as long as your mortgage taxes and insurance are up to date. However it is essential that you meet with a bankruptcy attorney who can review your situation to see whether a Chapter 13 would be right for you, in which case if you do have a second mortgage you could get that stripped off. This you cannot do in a Chapter 7. What other assets you own, your monthly income and household size are some of the variables that go in to making the decision as to what chapter of bankruptcy you can file and how efficiently your goals will be met. A chapter 7 bankruptcy is quick and sometimes cheap but it is not always the best decision for you.
As has been pointed out to you, if you keep current on both mortgages, there should be no problem keeping both properties. And, so long as the rental income doesn't create an issue for you with the means test, you should not have any problems keeping all of it.
However, you should consult with a qualified bankruptcy attorney BEFORE you file.
