More details to this question:
We have 8 rental properties that we can no longer sustain. We do not have any other on-going debt besides this secured debt and associated expenses (prop. taxes, HOA fees, insurance) since we do pay off our credit cards monthly. Out of the 8, 3, if sold, we may have enough to pay off the loans, the other 5, we guess, will have to be short-saled/deed in lieu/foreclosed since we will owe a lot more than what it will sell for. Is bankruptcy the best option in our case?
6 ANSWERS
Bankruptcy Attorney serving Herndon, VA
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Maureen O'Malley
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Bankruptcy would be the fastest and easiest, I think. If 3 could be sold, the Trustee would do it for you. You would also need to let your credit cards go, unless the properties are owned under a corporate name, as credit cards close accounts when a bankruptcy is involved. A short sale has the same negative effect on your credit report, and you would either get a 1099 for the difference or the lender would require you to assume the debt for the balance. This is if they even agree to a short sale in the first place.
Answered on Jun 09th, 2011 at 9:29 AM
Alternative Dispute Resolution Attorney serving Ventura, CA
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Zahn Law Office
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Perhaps. Filing for chapter 7 relief will protect you from deficiency judgments for short sold property. If you are in my area and are looking for an attorney, please contact me for a free consultation.
Answered on Jun 08th, 2011 at 4:52 PM
You may wish to try and exhaust the short sale option but if that doesn't seem feasible in a timely manner, bankruptcy may be your best option.
Answered on Jun 08th, 2011 at 2:20 PM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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Bankruptcy prior to foreclosure may well be the best option. For one thing, there could be negative tax consequences of foreclosure, short sale or deed in lieu. Consult with an accountant first and then a bankruptcy attorney.
Answered on Jun 08th, 2011 at 11:44 AM
Litigation Attorney serving Portland, OR
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Daniel G. Hoarfrost
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At some point, you may have no other choice.For the time being, you might as well continue to work with the mortgage lenders.
Answered on Jun 08th, 2011 at 11:28 AM
Glen Edward Ashman
Bankruptcy can be a very effective way (if you qualify to file) to deal with bad real estate deals, and sometimes works far better than things like short sales, which often fall apart and have serious pitfalls. Short sales rarely work out and many banks will not accept deeds in lieu. It's important to sit down with a bankruptcy lawyer as soon as possible to evaluate all options (and the best timing).
Answered on Jun 08th, 2011 at 10:48 AM