I am filing a ch 13 because I have a rental property I want to keep, however, I am wondering. If the property is current on it's mortgage, and there isn't any equity in the property, might the court allow me to keep it if I file a Ch. 7? I do pass the means test and am eligible to file a 7 if I choose to do so.
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Generally, if there is no equity, and the rental income pays the obligations of the the renal property, then you can keep it in a chapter 7.
This blog post explains the issues
In short, if there is profit or a short fall from the rental income, the US Trustee will typically object. -
Something to think about.... there is a big difference between being current on your mortgage and having a property that is making money. If you don't have at least 30+ % of the rental income left over after paying the mortgage, then you really need to think long and hard about getting rid of it.Originally posted by cosmicmama View Post
And in my opinion, the 30% left over after paying the mortgage is very conservative. You really need to be in the 40 to 50% range to get serious about it.
Been there, done that, got the scars to prove it.All information contained in this post is for informational and amusement purposes only.
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