Will I lose my rental home if I file for a chapter 13 bankruptcy? 19 Answers as of June 02, 2013I do not want to lost my rental home in Mexico. I am really worried that I will lose this asset if I file for bankruptcy. This home is something that gives me some kind of income, although it is not stable. Can I keep this exempt in a chapter 13 bankruptcy?
Law Office of Nanina Takla | Nanina Takla
You can't keep your rental home "exempt", but if the total amount that you pay through your chapter 13 plan is more than the value (as in equity) of your rental plus any other non-exempt property, then you should be able to keep the rental.
Answer Applies to: Oregon
Yahima Suarez, A Law Firm, PL | YAHIMA SUAREZ
This property will not be exempt but may be worked out under the plan. You should review your income, assets and debts with an attorney to let you know if you qualify for a chapter 13 bankruptcy and what are your real options before you file. A chapter 13 is a financial restructure and is not as easy as a chapter 7. The above is only general information and shall not be construed as legal advice. It is always recommend you consult with an attorney to review all the details of your case.
Answer Applies to: Florida
Ipson Law Firm, PLLC | Michael Ipson
*Chapter 13 bankruptcies do not require the liquidation of property* as Ch 7 bankruptcy when property is unable to be exempted. Instead, Chapter 13 bankruptcies are funded by the monthly payments filing debtors make to their Ch 13 plans. Personal and real property is not subject to liquidation (seizing and selling off of property by the Trustee assigned to a Chapter 7 case by the court) in a Chapter 13 at all. That does not mean, however, that it is always possible to retain a second home or second piece of real estate in a Chapter 13, particularly if it is a home for which you are making mortgage or other payments. The Chapter 13 Trustees, whose approval is required for the bankruptcy courts confirmation of a new Chapter 13 Plan, will require the surrender of real estate that is not your primary residence and which is a drag on the bankruptcy estate, which is the legal estate created with the filing of a bankruptcy petition, which contains everything your own, everything you owe, and everything you are owed, other than exempted property. A real property is a drag on the bankruptcy estate if, quite simply, it costs more money than it brings in. That is, if you own a rental home which costs $1000/month in mortgage payments, requires $50/month in maintenance, and for which you must pay an average of $100/month in property taxes, this home is costing the estate $1,150/month. If you are renting that house out for less than $1,150/month, it is a financial drag on the bankruptcy estate, it is *costing money*. In this situation you could lose your rental home.
Answer Applies to: Utah
Steven Harrell, Attorney at Law | Waymon Steven Harrell
Rental property cannot be exempted in a Chapter 13 or a Chapter 7 proceeding, because it is not your primary residence. Is the rental property necessary for you to maintain plan payments in a Chapter 13 case? If the answer is yes, then keeping your rental property is possible. If the answer is no, then the house should probably be surrendered.
Answer Applies to: Georgia
Bodow Law Firm PLLC | Ted Araujo
Maybe, and yes. It depends on the amount of equity and the other property you have that uses up the exemptions. We have to know all of the assets and other issues related to property, not just this one property. And, even if the equity is not protected you could protect it in a Chapter 13. Again, it depends on a number of factors having to do with the amount of equity. If the rental property is worth about what you owe on it you should be able to keep it without any other complications.
Answer Applies to: New York
Rhonda R. Werner Schultz, PL | Rhonda R. Werner Schultz
So long as you can pay back debt in your Chapter 13 plan that is equal to the value of any equity you have in the home you will be able to exempt the property. For example, if you have $15,000 of equity in the Mexican home you will be required to pay $15,000 of debt in your Chapter 13 plan. If your debt is less than the value of the equity in the home, you will not likely be able to exempt the property, unless it qualifies under the standard exemptions. You should consult with an attorney about all of your assets and whether retaining the home is feasible if you file bankruptcy.
Answer Applies to: Wisconsin
Ashman Law Office | Glen Edward Ashman
You totally misunderstand Chapter 13. Get a lawyer and don't screw up by acting pro se. Exempting it has NOTHING to do with Chapter 13. Whether you can keep it depends on the creative drafting of a plan and you will not get the answer in any form.
Answer Applies to: Georgia
Diefer Law Group, P.C. | Abel Fernandez
It depends on how much equity you have in the home. There are limits of what you can protect. If the equity exceeds what you are able to protect, then you would not be able to protect the entire amount and would have to buy back the excess equity from the court.
Answer Applies to: California
Bordeaux Law, P.C. | Clifford Bordeaux
You can usually keep assets in Chapter 13 if you agree to pay your unsecured creditors the value of any nonexempt assets. You need to consult with a bankruptcy attorney and be prepared to disclose the value of the property, the value of your other assets and information about your income and expenses. It is necessary to know the details in order to determine whether you would be able to keep the property.
Answer Applies to: California