BK7 and Investment Properties

[jd433]

I have 3 properties aside from my primary residence. 2 of them have no real equity or cashflow I just got them a year ago with no money down and the rent is about what the payment is. 1 of them I share title with my mom. this property is my moms primary residence and does have maybe 50k in equity.

I have lost a couple of homes in Arizona to foreclosure and although the laws in Arizona protect one from judgements after foreclosure one of the loans was an equity line of credit. and apparently I will be liable for it.

I am wondering what the possibility is of keeping the 2 rental homes and the home I share with my mom while still filing chapter 7. I only make about 45k year and am hoping to come out free with my 3 other properties and my home.

[lrprn]

I am wondering what the possibility is of keeping the 2 rental homes and the home I share with my mom while still filing chapter 7. I only make about 45k year and am hoping to come out free with my 3 other properties and my home.

Frankly, not good. When you file Ch 7 (or Ch 13 for that matter), your state's bankruptcy exemptions control how many assets you can keep after filing. (Are you still in Arizona?) Given the poor market in most areas these days, realistically how much equity do you have in all three properties right now?

The homestead exemption is typically used for your primary residence. If the other three properties you have have so little equity still can fit under your state's homestead allowance and (if they exist) wild card or other related exemptions, then it's possible you *MAY* be able to keep one or more of them. A lot depends on how your local bk court judge and trustees treat investment property outside your primary residence.

With this situation, you need experienced legal representation to file this case. Have you set up 3-4 free or low cost initial appointments with bankruptcy lawyers in your area? If you haven't, it's time to do so.

Also you should look at filing Ch 13 which would allow you to keep all your investment properties and other secured assets and only pay back a portion of your unsecured debt over the next 3-5 years. It's worth checking out if you can't preserve your mother's property any other way.