I have two investment properties (both vacant) and neither one of them is worth what I owe on them. If I filed for Chapter 7, I would obviously include them in the bankruptcy because I don't want them any more. If I gave the properties up in the bankruptcy, and let's say that the sale of the properties combined for $100K but I owe over $140K on them, could the lender (same lender on both houses) come after me for that $40K deficiency even though I included the properties in bankruptcy? I thought that deficiciency would be discharged, because that's the purpose of filing bankruptcy. The lender told me that he would get the judge to take the properties out of the bankruptcy and I would still owe the deficiency no matter what and include the attorney's fee's. Can they do that if I gave the two properties up in the Chapter 7? I think he may just be trying to scare me. I spoke with an attorney and she said that the deficiencies would be included with the BK and the lender couldn't come after me for any deficiencies. Just want another perspective on it. Thanks.
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Hi,Originally posted by rjmcconne
Under most circumstances, negative equity from forclosures and repos are discharged under the BK 7 filing, and the lender will have to write off thier lossess. However, depending upon your income and state laws the lender could still attempt to collect from you.
Good Luck!
The information provided is not, and should not be considered legal advice. All information provided is only informational and should be verified by a law practioner whenever possible. When confronted with legal issues contact an experienced attorney in your state who specializes in the area of law most directly called into question by your particular situation. -
Thanks for the info. Would it be better to wait until after the houses foreclose on to file or just file now and include them in BK and be done with it? I live in Florida. Thanks.Comment
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It doesnt really matter. If you file prior to foreclosure, just factor in the balance of the negatively equity you'd have on your schedules list.Originally posted by rjmcconne
Good Luck
The information provided is not, and should not be considered legal advice. All information provided is only informational and should be verified by a law practioner whenever possible. When confronted with legal issues contact an experienced attorney in your state who specializes in the area of law most directly called into question by your particular situation.Comment
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I think the guy was just trying to scare you, personally. I can't imagine why the deficiciency would not be discharged. The finance company will just have to eat the deficiency after they auction off the property you surrendered. Your lawyer is correct. I know this because it's one of the first questions I asked before filing my #7.Comment
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