Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
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The debt associated with your mortgage is a secured debt not an unsecured debt.
Secured debt limit: $1,081,400 You can qualify for Chapter 13 bankruptcy only if your secured debt does not exceed $1,081,400. This means that all secured debts (including loans for houses, cars, or anything else tied to property) must total less than that amount.
Unsecured debt limit: $360,475 Additionally, filers can have up to $360,475 in unsecured debts. This means that credit card debt, payday loans, medical bills and other debt not tied to any property must not exceed that amount.
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I need to know from you the followings:
Will I be able to file chapter 13 if I let my deeply under water house foreclosed. In other words, after foreclosure of the house, will the $400K unsecured debt from house still count against the total debts and therefore I will not be able to file chapter 13?
What are other option beside chapter 11? Thanks
1. In a chapter 7 the BK trustee will hold the rights to your interest in the LLC. If those rights are worth something, he may sell them for the benefit of the creditors.
2. The full 800k of your mortgage is a SECURED debt not an unsecured debt. It does not matter that the current value of the house is 400k. It was a secured debt by virtue of the fact that the home was pledged as collateral for the home loan. So, you should be able to file a chapter 13 because your unsecured debt amount is only 100k.
3. The above should have answered all your questions. If not, please write back.
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