Questions

[rjmcconne]

I may be due for a promotion in a few weeks at work and if I got it, it would give me a larger monthly income and I don't think I'd be able to qualify for a Chapter 7. I'd qualify for a Chapter 7 as of right now. I'm considering filing for bankruptcy because I made some bad real estate choices. I have two investment properties. Once is in horrible shape and isn't worth near as much as I owe on it. The other one is in pretty good shape and has some equity on paper, but due to the neighborhood it is in, i can't imagine a trustee sale will net as much as I owe on the house, thus leaving another deficiency. I am not able to make payments on these houses anymore. I am trying to get a refinance done on one house that would give me enough money to fix up the run down house. I'm trying to avoid bankruptcy at all cost, but I don't want to dig myself into a deeper hole. I have been having trouble with the refinance and I am not sure that it will get done. To prevent from being sued and have my wages garnished, I would need to file BK and include those two properties. I'm sure the bank (same lender on both properties) would foreclose and I would have to work the deficiency into the repayment plan if I filed for Chapter 13. There is no way that I would be able to repay those deficiencies during the repayment plan. After my Chapter 13 is complete, could the lender still come after me for the deficiency or would it be discharged after the 3-5 repayment period? If my promotion (my promotion isn't a lock right now. I'm competing with a few other people) kicks in before I file, would there be a way to just use my old income since it is so close to when I'd file. Or should I try and file asap before I get a raise and make things harder on me. BK is a tough decision for me, and I see a way out if things work out with this other house. But, if they don't I could be digging a much deeper hole for myself in the long run. Any advice would be greatly appreciated. Thanks.

[Dawn1970]

It is possibly one of the hardest decisions you'll ever make in life, isn't it? I can really relate. Even after I made the decision, I cried and fretted all the way to the lawyer's office, but of course, felt much better when I left there because there was so much less uncertainty. Now I know it was quite possibly the smartest decision I ever made. I have had my creditors' meeting already and am just waiting for the discharge.

So you don't know if you'll get this raise in pay or not? If you get approved for the refinance, what will your interest rate be like? Even if you get the raise and get to refinance, will this provide a lot of relief to your budget or continue to just keep you barely above water, since you did mention that the distressed property needs some pricey repairs and improvements? Are your rentals placed occupied by renters? A lot of that would factor in. You are the only person who can really decide what to do and I wish you the best of luck with whatever you decide!

[rjmcconne]

Hi. Both of the properties are vacant. I am in this with a partner. The distressed property is under both our names, but the other property is just under mine. I guess I'm stressing out the most because of my raise at work. I really want the raise and could really use the extra money, but if I do have to end up filing bankruptcy, i think it could end up hurting me in the long run because I'd probably have to do a Chapter 13 instead of 7. It's kind of bitter sweet. My wife and I (she wouldn't need to file, but our incomes have to be combined because we are married) had come to the realization that I should file for BK. I have already consulted with an attorney in this matter. But, on Friday, we spoke with the lender of the houses, and he was willing to work with us just a tad. He suggested my partner buy the one property from me and then have me assign my interest in the distressed property to him. That would take me off the hook on both properties and leave him on big time. He said he may be willing to do that. If this refinance goes through on the one house, then he said he'd let me assign the distressed property over to him and that just leaves me on the hook with one house. But, i really don't want this house and we had a tough time selling it because it's in a lower neighborhood and I'm sure people are having a hard time getting financed to buy the house. I may have to try and lease option it to somebody. Maybe that will work. But, I won't be able to afford payments on the house if I can't get anybody in the house to help with payments. Then I'd be stuck with a foreclosure and a large deficiency on it and I'd still have to file. Really tough decision. I pray about it constantly.