Bankruptcy Question: "I have 4 rental properties that are under-water with over -$300,000 of negative equity
, and have -$3,000 per month negative cash flows. Additionally, I have approximately -$135,000 of debt on my Credit Cards that have a $2,100 minimum payment required. My plan is to Chapter 7 shortly.
Issue: While I pass the “means test
”, I am concerned that for the Oct 2010 to May 2011 period I used the rental checks (approximately $6,000) to supplement my Pension
($1,200/mo) and our combined Social Security ($2,900/mo) to live on versus withdrawing $6,000 from my IRA as I previously had been doing.
Question: What is the likelihood that the Trustee
will not approve my Chapter 7 because I did not pay more of my creditors with the rent
checks and instead used the majority of the money to live on?
Note: For Oct – May six month period I began to prepare for the June 2011 filing by:
1. I stopped paying the mortgages on the 4 rental properties in October 2010.
2. I stopped paying the minimum payment required on the credit cards in October 2010.
3. I did continued making payments on my home mortgage and also on both cars. All are current.
4. I have no other secured or un-secured creditors.