Rental Property

[motox]

If i file bankruptcy does anyone know if they will make me move out of my more expensive home and move into my cheap rental property?

[lrprn]

If i file bankruptcy does anyone know if they will make me move out of my more expensive home and move into my cheap rental property?

Couple of questions first.....do you hope to keep both properties after you file? Which bankruptcy chapter do you plan to file?

[motox]

i would probably file a chapter 13. i wish i could just file on the rental but i know i cant..

[Boscoe]

Motox - everyone here is ready to answer your questions. Sounds like you are new to this, and we certainly understand your apprehension.

Questions:

-What state do you live in?
-What is your annual income, and if not steady, how much did you make in the last 6 months? Don't include the rental property income here.
-How much is each property worth and how much do you owe on each?
-Do you have a current tenant? If so, does the rental income cover the expenses (mortgage, taxes, insurance, utilities, maintenance, etc)?

If you can answer these questions, and we can give you some guidance on several things.

[motox]

i live in michigan, the rental property has tennats living in it but they dont like to pay very much... i make about 55,000 a year but in the sales world so in the last 6 months i have made about $37,000.. the rental property with the market is probably worth about 95,000 but i owe 123,000 and my current home that i live in is woth about $210,000 and i owe 194,000. The mortgage payment only doesnt even cover the full payment let alone taxes insurance and stuff...

[lrprn]

i live in michigan, ... i make about 55,000 a year but in the sales world so in the last 6 months i have made about $37,000.

The median income for one single filer in Michigan is $42,596 - you are just under that. If you have a spouse and/or children, then you'll be even farther under that - http://www.usdoj.gov/ust/eo/bapcpa/2...come_table.htm

This means it's possible for you to file Ch 7 rather than 13.

the rental property with the market is probably worth about 95,000 but i owe 123,000 and my current home that i live in is woth about $210,000 and i owe 194,000.

Since you are upside down on the rental property and it isn't brining in enough money to pay for itself, have you considered surrendering your rental property in bankruptcy and trying to keep your house?

You have $16,000 in equity on the house - Michigan allows only $3,500 for a homestead (and there's no wild card) - http://www.bankruptcyinformation.com/MI_exemp.htm . However in Michigan you can use the federal exemptions if you want - the federal exemptions allow $17,450 + $925 of any property - http://www.bankruptcyinformation.com/exemp-fed.htm . This would be enough to protect your house at least.

Do you have enough income to keep the house and pay its costs along with your other living expenses, utlities, etc if you didn't have the rental property and all your unsecured debt was wiped out?

[Boscoe]

Definitely use the federal exemptions. Actually, they raised them in 2007 to $18,450, and there is a wildcard exemption that you can use if you don't use all the federal home exemption.

Also, the $210k home value you referenced - that is probably your best guess. In this market of slowing sales and sliding prices, I bet that your home's value is lower than that, or at least you can make a case for it. See if you can get a comparative mkt analysis by a local real estate agent. Just tell them you are thinking of selling - but not sure yet and want to get a preliminary price. You can definitely keep this house. If the rental is not covering your payments, then let it go in the bk.

[demismom]

We live in Michigan and they did NOT force us to move into our rental property, BUT we wanted to surrender it, so that's a little different than your situation.

[motox]

i want nothing more then to let the rental property go.. that is pretty much the only reason that i may file bk so that when the foreclose they cant garnish my wages and go after me for more