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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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we will file chapter 13 bankruptcy because we are behind on

Customer Question

we will file chapter 13 bankruptcy because we are behind on 2 of our 3 rental houses and on 6 credit cards ($30 K on those). We want to keep our house and the one rental. A realtor talked to us to short sale the 2 delinquent properties but he's putting them for $70 K less each than what we owe. How will that impact our filing and the money we'd have to pay? Is it better to just let them foreclose instead (foreclosure on one is pending on 4/6/12 at 10 am). The credit cards are all with collectors, we get a lot of calls but hey don't bother us since we know we are headed for bankruptcy anyway. Just not sure if short sale benefits our situation or complicates it?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer.
1) Short selling your property will not affect a Chapter 13 filing or the money you would have to pay.
2) If you are going to file a Bankruptcy, so that your liability for the mortgages for the 2 rental properties you don't want to keep can be discharged, it would not matter is you short sold your property, or allowed or allowed it to foreclose.
3) if you are going to file a Bankruptcy, you will not benefit from a short sale, but it should not complicate anything either.
cfortunato and 3 other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.
Do you know how they calculate what we would have to pay each month for the chapter 13? I mean, is it going to be based on our income and expenses or they come up with a number solely based on what our liabilities are? i make about $4,000, huband brings in $1,000, the rental brings $950 and after all our expenses we have about $400 disposable income left a month. I am afraid they will want more than , I can't find anywhere how much and how long we would have to pay....
Expert:  cfortunato replied 5 years ago.

Thank you for accepting my answer.

Your Chapter 13 monthly payment will be based on your income and allowable expenses. If you have only $400 per month left over after subtracting your allowable expenses, that is what your monthly payment will be.