Income from Land Contract

[so_far_in_debt]

Just wondering if anyone knows how income from a land contract is delt with in BK?

I hold a land contract and receive $339 per month. Would the $339 be considered income?

I am looking at exemptions and just trying to figure out how the land contract comes into play. I live in Michigan.

[hansky]

Just wondering if anyone knows how income from a land contract is delt with in BK?

I hold a land contract and receive $339 per month. Would the $339 be considered income?

I am looking at exemptions and just trying to figure out how the land contract comes into play. I live in Michigan.

It depends on several factors. Chapter 7 or 13? What is the nature of the interest in the land or contract? It appears obvious (from the minimal facts)the $339 is income, since it is, after all, income. Beyond that, the question would be whether it is an asset that could be liquidated for the benefit of creditors by the trustee in a Chapter 7? If you are in a Chapter 13, does the asset have value such that a creditor could object if they don't receive as much as they would in a Ch. 7 liquidation? One would need many more facts.

[so_far_in_debt]

hansky, I have not filed yet. I have 1st appointment with attny this Thursday.
I think I qualify for 7, but not sure if this would be my best option.

About three years ago my ex husband withdrew money from his 401k and bought a small fixer upper house. He then sold it to a friend on a land contract. We divorced about 2 years ago and the land contract was given to me in the divorce agreement.

[HHM]

At a minimum it will probably be treated as income, and unless you have wild card exemption of some kind, it is probably something you cannot exempt. The other issue will be the "asset" value of the land contract. The trustee will not care so much about the "income" coming from the property, but how much he could sell the contract for. The one thing in you favor is that there is probably not a ready market to liquidate the contract, but nonetheless, it will be an asset, probably one you cannot exempt.