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dylatess
dylatess, Attorney
Category: Bankruptcy Law
Satisfied Customers: 5145
Experience:  37 plus years of experience specializing in bankruptcy law
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Debtors chap. 13 plan was dismissed after 2 yrs. for being

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Debtor's chap. 13 plan was dismissed after 2 yrs. for being in arrears in trustee payments. Debtors own a house they live and a small rental property (duplex).
1) Can they file for a chap.7 bk right away after chap. 13 dismissal?
2) Can they still get to keep the rental property if they can make the mortgage payments for the house and rental property in a chapter 07?
3) is there an alternative in chap. 07 similar to chap. 13, whereby you can discharge the 2nd or junior lien?

Over 35 years, I have assisted my clients with debt problems having filed more than 35000 chapter 7 and chapter 13 bankruptcy petitions.

 

Can they file for a chap.7 bk right away after chap. 13 dismissal? MOST LIKELY YES, YOU CAN FILE IMMEDIATELY. HOWEVER, LOOK AT THE DISMISSAL NOTICE AS SOME DISMISSALS SAY YOU MUST WAIT SIX MONTHS TO FILE AGAIN- BUT THAT IS NOT TOO COMMON.


2) Can they still get to keep the rental property if they can make the mortgage payments for the house and rental property in a chapter 07?

 

YES IF THERE IS NO EQUITY IN THE RENTAL. IF THERE IS EQUITY, THEY CANNOT EXEMPT OR PROTECT IT IN A CHAPTER 7 AND THEREFORE IT BECOMES AN ASSET OF THE BANKRUTPCY.


3) is there an alternative in chap. 07 similar to chap. 13, whereby you can discharge the 2nd or junior lien? JUNIOR LIENS CAN NOW BE STRIPPED IN A CHAPTER 7 PROCEEDING. BUT IT IS TRICKY AND YOU WILL NEED THE ASSISTANCE OF AN ATTORNEY.

 

I wish you well. Please be so kind as to rate my answer ok or better so that I am paid for helping you.



Customer: replied 3 years ago.


Could you briefly elaborate on how a 2nd lien can be discharged in a chap.7 or circumstances this is allowed?

If the property value is less than what is owed on the first and second combined, and by eliminating the second the equity remaining would be 100k or less (if married ) or 75K or less (if single) you can file a motion to strip the second. But this is a separate proceeding that follows the bankruptcy hearing. Likewise, it requires pleadings and is not form work. So you will need an attorney.

 



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