Chapter 7 or Chapter 13 ?...another sub-prime casualty

[Underwater]

I live in Florida
I own one rental property in Florida. Wife is not on title. We own no other properties
I owe 508k (mortgage plus HELOC), a $3,600 monthly pmt.
Current market value 300-350k, so short sell is unlikely.
Rental income is 1,525/mo.

Monthly gross income is $3000. I'm self-imployed (1099). My S-Corp pays me.
My S-Corp acct has a balance of $5000
Wife's gross income $2800.
Both cars paid for, but I need a new one (95 accord).
Small boat (13 ft) worth $4000
CC 1, current balance $9000. I pay min ($200) at 0% int till Jan '08
CC 2, current balance $2000. I pay this off completely every month.
I rent an apartment. Rent plus utilities,phone, cell, etc., $2000/mo
Food for two, $500/mo
Business expenses incl gas, $500+.
Savings $300, Checking $14. I've been tapping into my HELOC to pay bills, credit limit will soon be reached.

My only other large asset is tied up in a Hedge Fund. Since the sub-prime meltdown began in May '07, this fund has been losing money. November '07 my account was valued at $70,000, down 90%. The hedge fund manager is not allowing withdrawals, and hasn't since June '07. In a few months there may be nothing left, or it may start to recover. Who knows!

I am filing for bankruptcy. My wife is not.

So, can I file for chapter 7 or chapter 13....any advice?

Remember, I have a large asset valued at $70,000 (november), but I can't get to it. I guess a bankruptcy judge could order the fund to release my money, but that could take months if not longer, as the hedge fund/fund manager has their own lawyers.

Thanks

[Underwater]

Sorry about the multiple posts. I thought I was editing my one post.

[keepmine]

With a $70K asset. you'll need to file a 13 if you wish to keep it. All a trustee need do is just not close your case until the manager distributes the funds. No legal wrangling required.
Alos, the S-corp is an asset and may well have value to a trustee. You don't have a routine run of the mill bk. You really need to schedule some consultations with 3 or more bk lawyers. Most will give free initial consultations.

[WantToBeDebtFre]

Talk to a few attorney's and see what they have to say. The trustee will be looking to recover assets so you don't want to mess with that.

[Underwater]

Thanks for the advice. I'm scheduled to see an attorney on monday. I'll let you know how it goes.

Am I responsible for the difference between what I owe on the mortgage/HELOC and the market value, once BK and foreclosure occor?

Also, if I file chapt 13, you're saying I can keep the $70k and boat, after the CCs are paid/pmt plan, of course?

By the looks of the ABS market, by the time my BK is filed, that 70k will probably be worth seven bucks. That is why I was wondering if I could file chapter 7.


Thanks again

[keepmine]

Any deficiency balance will be considered unsecured debt and dischargable in bk.
One of the reasons people file a 13 is, to leep assets that are above your states exemption level. I didn't think to ask but, is the fund part of a 401K or similar ERISA qualified retiement account. If so, it's exempt from creditor seizure.
The kicker in a 13 is, all disposable income goes to pay unsecured debt {after secured and priority dets are paid}. But, unsecured creditors can't get less in a 13 than, they'd have gotten in a 7.