My wife and I are considering filing bankruptcy. We are both employed and also own some rental properties as a sideline business. We wish to reaffirm the rental mortgage debts as the rentals have dropped in price and are upside down.
My question is how the income from the rental properties will be treated.
The past two years have been hard on the rentals... two very bad evictions (tenants trashed the houses) and a bad repair (jackhammered up slab floor to replace sewer line.) The rental repair reserves are pretty much gone and only the separate savings account for security deposits is untouched. But going forward, the situation is improving: better tenants, long-term tenants.
Left alone, the rentals will make money and rebuild the repair reserves in about two years to the point where I can handle major repairs and vacancies again. But if the BK trustee wants to add all the income to my payment plan, the cost of a single repair will put me out of business.
The rental company is a separate single-member LLC with its own EIN. The LLC has its own bank accounts under the EIN (my name is on them as the authorized user.) The houses are titled under the LLC, but the loans are under my name and my wife.
So my question: how much repair reserve will the bankruptcy court allow me to build up? And do I have to perform extra filing and documentation each month, or is my Schedule E each year enough?
Thanks!
My question is how the income from the rental properties will be treated.
The past two years have been hard on the rentals... two very bad evictions (tenants trashed the houses) and a bad repair (jackhammered up slab floor to replace sewer line.) The rental repair reserves are pretty much gone and only the separate savings account for security deposits is untouched. But going forward, the situation is improving: better tenants, long-term tenants.
Left alone, the rentals will make money and rebuild the repair reserves in about two years to the point where I can handle major repairs and vacancies again. But if the BK trustee wants to add all the income to my payment plan, the cost of a single repair will put me out of business.
The rental company is a separate single-member LLC with its own EIN. The LLC has its own bank accounts under the EIN (my name is on them as the authorized user.) The houses are titled under the LLC, but the loans are under my name and my wife.
So my question: how much repair reserve will the bankruptcy court allow me to build up? And do I have to perform extra filing and documentation each month, or is my Schedule E each year enough?
Thanks!