Hi - my name is XXXXX XXXXX X'X a Bankruptcy and Consumer Protection attorney here to assist you.
Is it clear that what you currently owe for your two investment properties is more than what you owe for the property that was your residence, in addition to the total of your other personal debt?
In other words, is it clear that the debt your incurred for business purposes is greater than the debt you incurred for personal purposes (including your prior residence)?
Yes, the total business related debt is $823,067. The total debt on our personal residence and other minor consumer debts is $739,889.
By the way, since we no longer live in our former residence, and the county has withdrawn or homestead exemption, can we include it as a business debt since it is now technically available to be rented?
Thank you for your response.
Because your business debts clearly exceed your personal debts, you do not have to worry about filing a Chapter 7, even though you do not pass the Means Test - because of your income. This is because Chapter 7 filers with business debts greater than personal debts do not have to pass the Means Test.
And yes, if there was a problem with passing the Means Test (which would not be the case with you), a Bankruptcy filer would be allowed to convert the case to a Chapter 13.
The amount owed for your former residence would not be considered to be business debt - even though you are no longer living there, and even if you rented out the home,
because the Bankruptcy court looks at what the debt was incurred for at time the debt was incurred - not at the time the Bankruptcy was filed.
Yes - even though your debt is primarily business debt, your personal Bankruptcy will discharge both your business debts and your personal debts - including the balance of what is owed for your former residence.
If your Bankruptcy is filed before the lender gets a deficiency judgment, the Bankruptcy will prevent the lender from getting a deficiency judgment.
If your Bankruptcy is filed after the lender gets a deficiency judgment, the Bankruptcy will discharge the judgment.
Yes - even though your debt is primarily business debt, your personal Chapter 7 Bankruptcy will discharge both your business debts and your personal debts - including the balance of what is owed for your former residence.If your Bankruptcy is filed before the lender gets a deficiency judgment, the Bankruptcy will prevent the lender from getting a deficiency judgment.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).