How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask cfortunato Your Own Question

cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
Type Your Bankruptcy Law Question Here...
cfortunato is online now
A new question is answered every 9 seconds

Chapter 7 Bankruptcy Question I have 4 rental properties

Customer Question

Chapter 7 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.
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 3 years ago.
Hi JACustomer,
You will not be penalized because you did not use the rent money to pay the mortgages, and instead used the money for living expenses. It does not matter that you could have used your pension money instead.
As a matter of fact, if you pay too much to any one creditor before a Bankruptcy is filed, the Bankrutpcy trustee can make the creditor return the money, so that it can be evenly distributed to all creditors.

I think this is what you wanted to know. If not, please let me know.
Thank you!
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
cfortunato and 3 other Bankruptcy Law Specialists are ready to help you
Customer: replied 3 years ago.
Follow up: If the Trustee in my 341 meeting does ask my question to you...what would be a good reply?
Expert:  cfortunato replied 3 years ago.

The trustee might ask you what you did with the money, since you did not use it to pay the mortgage. You would have to answer honestly - that you used to money to live on instead of using money from your IRA. Basically, the trustee would want to know if you still have the money, as he might then be able to take some of it.

If you have spent it on everyday expenses (not on luxury items), that would be the end of the inquiry.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK

Meet The Experts:

  • FiveStarLaw


    Satisfied Customers:

    Bankruptcy Lawyer. Experienced.
< Last | Next >
  • FiveStarLaw's Avatar



    Satisfied Customers:

    Bankruptcy Lawyer. Experienced.
  • Terry L.'s Avatar

    Terry L.


    Satisfied Customers:

    Better Business Bur 15yrs bankruptcy experience. Chicago Bar
  • cortrightlaw's Avatar



    Satisfied Customers:

    Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
  • dylatess's Avatar



    Satisfied Customers:

    37 plus years of experience specializing in bankruptcy law
  • JoeLawyer's Avatar



    Satisfied Customers:

    Attorney in the practice of Bankruptcy Law since 1996
  • Brent Blanchard's Avatar

    Brent Blanchard

    Bankruptcy Attorney

    Satisfied Customers:

    Twelve years experience in all aspects of debtor & creditor BK.
  • A.J.'s Avatar



    Satisfied Customers:

    Experienced consumer bankruptcy attorney.

Related Bankruptcy Law Questions

Chat Now With A Bankruptcy Lawyer
3102 Satisfied Customers
Bankruptcy professor.