equity in Mexican condo, will I be able to keep condo in order to pay debt?

[humster]

We are paying on a Mexican condo which has a lot of equity. Can we keep this property and sell it in order to satisfy creditors or a chapter 13 payment schedule? Would our creditors be willing to buy it and use the equity to satisfy their claims? Thanks.

[lrprn]

We are paying on a Mexican condo which has a lot of equity. Can we keep this property and sell it in order to satisfy creditors or a chapter 13 payment schedule? Would our creditors be willing to buy it and use the equity to satisfy their claims? Thanks.

A couple of questions first...

I'm assuming that this Mexican condo is not your primary residence - correct? Are you renting it out to pay the mortgage and perhaps a bit of extra income besides? Or is it a vacation home or time share?

What is your approximate combined income from all sources for the last six calendar months? (Trying to sort out if you qualify to file Ch 7 or have to file Ch 13.)

Last question - which state do you live in? (States differ whether their bankruptcy exemptions protect only the primary residence or additional homes, and how much homestead equity they allow.)

[humster]

Correct, it is not our primary residence and we are renting it out. We live in Arizona. Combined in come is probably 35-36,000. I think we will have to file 13 right? Again, my questions are twofold. Within a bankruptcy would we be given the time to sell this property in order to pay off debt? Outside of bankruptcy do you think that creditors would be amenable to do the same?

[HHM]

I am not sure I am understanding your question.

You can sell the condo whenever you want and use that money to pay creditors (assuming you can find a buyer). But your creditors are not going to buy it.

First thing you need to figure is what chapter of BK you actually qualify for. If you file Chapter 7 (assuming you qualify) and you have no intention of keeping the condo, you can simply let the BK trustee take the condo and sell it and use the money to pay creditors. The only reason you would file chapter 13 (assuming you qualify for a 7) would be to KEEP the condo. But, if you do not want to keep the condo, either sell it and use the proceeds to pay the debt yourself (your creditors are not going to "buy it" from you), or file chapter 7 and let the trustee sell it (since it is doubtful there is any asset exemption you have that can cover the equity in that property).