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Maverick
Maverick, Attorney
Category: Bankruptcy Law
Satisfied Customers: 5767
Experience:  20 years of professional experience
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I am considering chapter 7 bankruptcy in Colorado. I have been

Customer Question

I am considering chapter 7 bankruptcy in Colorado. I have been out of work for 7 months and my wife just lost her job.
We have a rental house in Indiana that we are upside down in. We owe about 100k on it, it maybe worth 75k.
I want to file asap while our income is at it's lowest. Although she has a temporary job I expect that we will both be on unemplyment soon.
The rental house is presently unoccupied but I may be able to rent it. The question is should I?
It creates abut 200-300 negative cash flow a month when it is rented.
What assets are excempt in Colorado?
We own a house in Colorado that is worth about what we owe on it. We own one car.
We owe about 70k in unsecured debt, on two personal loans.
Any other advice is appreciated.
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Maverick replied 7 years ago.
It appears to me that you would benefit from BK. It will give you a fresh start and discharge most of your debts. You will be able to keep "exempt" property under CO law.

The upside down rental will be sold and the proceeds will go to the bank. Any negative balance will be discharged. The 70k unsecured debt will likely also be discharged (assuming not fraud , etc.).

If there is no equity in your residence, then you may want to let it go. The car and residence can be evaluated by looking at the exemption list at this link:

http://www.naldp.org/download/exemptions/Colorado%20EXEMPTIONS.pdf

There is a 10k joint exemption for equity in a car and 60k equity in a homestead.

JA experts are not permitted to have outside communications with JA customers. However, you may be able to find an bankruptyc attorney in your area to further assist you by going to www.martindale.com.

Please click “ACCEPT” so I may get credit for my time. If you have a follow-up question, I would be happy to address it for you at no additional charge.
Maverick and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 7 years ago.

Thank you for your quick response.

You left one question unanswered though. Should I rent out the house in Indiana or let it sit empty while I am going through this process, so that the rental income doesn't affect my financial statement. Am I legally obligated to rent it if I can?

 

Thanks

Gary

Expert:  Maverick replied 7 years ago.
I will be back w/ you in a few minutes.
Expert:  Maverick replied 7 years ago.
Before you file bankruptcy what you do with the rental house is upto you. After you file, the trustee will decide what needs to be done. I am not aware of any laws that would require you to rent it out. BUt you may want to get a second opinion from a local BK lawyer.
Customer: replied 7 years ago.
Thank You
Expert:  Maverick replied 7 years ago.
Sure.

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