QUESTION
Can I file bankruptcy and include 2 rental properties?
Asked on Sep 17th, 2012 on Bankruptcy - Indiana
More details to this question:
We owe over $60,000 in credit card dept. Own two rental homes with mortgages that are more than the houses are worth. The notes are $472.00, and $714.00. The monthly rent is $550.00 (not including taxes & insurance) & $1045.00 (including taxes and insurance), but not water. My husband was laid off 1 1/2 years. Now he
works part time earning about $400.00 a
week. A pension of $1669.00, and social
security at $1300.00. So far not behind on any bills, but credit is growing, and we're choaking.
1 ANSWER
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Jeffery M. Haupt Attorney at Law
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You can definitely file Bankruptcy, but you should consult with an experienced bankruptcy attorney. It appears that one problem you may run into is with the Means test. If it is just you and your husband then you may be real close, if not over the median income for a two (2) person household in Indiana (this is before you count the rental income, which may or may not be income depending on how it would be presented).
Many bankruptcy attorneys offer low cost or free consultations to at least give you an idea of what to expect (whether you would qualify for a Chapter 7 or be forced into a Chapter 13, due to not qualifying for income purposes). But, just having the rental properties will not cause you to be unable to file for bankruptcy. You can include (actually must include them if you are a sole proprietor) the property and even surrender them back to the bank with no further obligation if you so chose.
Answered on Sep 17th, 2012 at 2:21 PM