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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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can an individual handle his own ch 11 bankruptcy or ist required to have an attorney ca

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can an individual handle his own ch 11 bankruptcy? or ist required to have an attorney? can an attorney be contracted on a consulting basis? I invested $400k in 2 properties- all of my retirement money- but properties are upside down about $300k. Wanted to do ch 11 and request loan= fmv. They are rentals, but could I move into one of them?
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 3 years ago.
Hi JACustomer,
1) Why are you thinking about filing a Chapter 11 instead of a Chapter 13 Bankruptcy?
2) Do your properties have more then one mortgage on them? If yes, is the balance of the first mortgage more or less than the market value of the property?
Customer: replied 3 years ago.

loans 2 properties = 1395,000

Co-signed property loan 650k not up-side down. covered under homestead

Property1- Loan 580k + second 80k (from inception) cost 900k

Property 2- 615k ( cost 760k)

Expert:  cfortunato replied 3 years ago.

I think you can file a Chapter 13, which is much easier and less costly than filing a Chapter 11. To determine this:

1) What is the current market value of the first property?

2) What is the balance on the mortgages for the first property?

3) What is the current market value of the second property?

4) What is the balance on the mortgages for the second property?

5) Do you have other debt - secured or unsecured - beside that on the rental properties?

 

 

Customer: replied 3 years ago.

#1- cost 900K FMV=550k Loan #1 580k and loan #2 80K (acquisition loans)

#2 cost 760k FMV= 450k loan $610k

 

#3- Home= homestead FMV 700k; Loan 650K

not 100% owner

 

Other loans = hospital/medical about $10k unsecured

No other debt. credit cards are current- pay monthly

 

 

Expert:  cfortunato replied 3 years ago.

The mortgage on your home brings your secured debt over the limit for a Chapter 13. You asked if you could move into one of the rental properties.

1) If you did this, would you be selling your current homestead?

2) Which property are you thinking of moving into?

 

Customer: replied 3 years ago.

Right. I thought that I was over the limit for CH 13. That's why I thought that my only solution would be Ch 11. Still, due to my current financial harship, I cannot afford to pay $20K+ to attorney. Thus, my initial doubts stand.

 

The homestead - I am only part owner and other owner would keep that house. No real equity if wanted to sell. besides, in reality I am only 10% owner. On Paper, it appears to be 50%. I would need to stay on loan until co-owner could re-finance. Not likely to happen soon.

If advisable, I would move into prop #2.

 

Expert:  cfortunato replied 3 years ago.

Once your name is XXXXX XXXXX the loan for your home, you would be able to file a Chapter 13 - because the secured portion of the mortgages on the rental properties is only the current market value of the properties - $450K + $550K = $1M, which is under the limit for secured debt.

Although there is no requirement that you use a attorney to file, it would be impossible to successfully file a Chapter 11 on your own, and it is unlikely that you would be able to find an attorney who would simply consult with you on that endeavor. This is because this type of consultation would be almost as time-consuming as actually filing the Bankruptcy.

Lastly, moving into one of the rental properties would not affect your ability to file a Bankruptcy.

 

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 4 other Bankruptcy Law Specialists are ready to help you
Expert:  cfortunato replied 3 years ago.
Thank you for accepting my answer!

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