Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.
Yes, you are correct that this is a bit unusual, but not too much!
First, yes, you can file for personal bankruptcy, and discharge the debts owed on the homes.
They will still foreclose to pay the banks if they are mortgaged out
If there is equity, the chapter 7 trustee could liquidate them to pay your debts.
The bigger issue though, is that you own a business.
The value of the business is the asset in the bankruptcy case, and the chapter 7 trustee can sell your interest in the business to pay your creditors as well.
If the business has no value, or negative value, then it wouldn't be affected.
If you signed personal guarantees, those would need to be listed in the bankruptcy case as well.
IRS debt might not be dischargeable.
If the debt is income tax and less than 3 years old, it doesn't discharge in chapter 7.
So, it sounds like a chapter 7 might not be the best option at this point for you.
You may want to talk to the bank and discuss a deed in lieu of foreclosure for the one that would sell short.
OTherwise, you can just work with the lender on the short sale.
You can either tax a tax hit on the discount the bank gives to sell if they forgive the balance, or you can negotiate a repayment plan for the shortage.
So, with these answers in mind, let me know what other questions you have.Thanks
I have a first and second motgage on the house that will sell short. The first most likely will get paid in full but he second will not.
So, you will have to work with the 2nd mortgage if they will agree to the short sale.
It seems it might be best to sell short or foreclose than go with bankrutcy. But the bank will have something to say about this at the end.
You risk losing the business in ch7
That is what I originally thought but neede a professional opinion. If I go with bankrutcy, I receive no assets anyway.
did you have any further questions ?
not for now
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