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socrateaser, Attorney
Category: Bankruptcy Law
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Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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i have 2 questions about a Chapter 13 bankruptcy in the State

Customer Question

i have 2 questions about a Chapter 13 bankruptcy in the State of California...

1) i have 2 properties 1 is my primary residence and the other is an investment property.
I am current on my primary residence, because of an illness in my family i got behind on my investment property. Hence I tried modifying my loan for the past 3 years with no fault of mine..bank kept switching negotiators etc.
long behold they have thrown me into forclosure. i want to make my pymts, but they say it's to late..
1)my question is if i file a Chapter 13 (repymt plan) can they touch my personal residence that has a lot of equity?

2) my 2nd question is if my bancruptcy is dismissed becuase i dont qualify will they still show up on my record as a bancruptcy? i heard i wont be able to reapply for another 180 days!
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 1 year ago.
Hello,

You asked:

1)my question is if i file a Chapter 13 (repymt plan) can they touch my personal residence that has a lot of equity?

A: California has a complicated homestead exemption law, which provides from $75,000-175,000 in equity protection to a debtor in bankruptcy, dependent upon the debtor's particular circumstances. See Code Civ. Proc. 704.730 (scroll down to section .730).

If your property has more equity than can be protected by the homestead exemption, then the bankruptcy trustee can order the property sold to pay your unsecured creditors, which would include the lender on your investment property, to the extent that your debt secured by the property exceeds the property's fair market value.

However, you can propose a bankruptcy plan that would catch up all of the payments on the investment property during the Chapter 13 plan, and thereby avoid a sale of your principal residence. The key question is whether or not you have sufficient income to pay your various debts during the course of the plan. If you do, then you're in good shape. Otherwise, your home could be sold to cover the difference.

2) my 2nd question is if my bankruptcy is dismissed because i dont qualify will they still show up on my record as a bankruptcy? i heard i wont be able to reapply for another 180 days!

A: A subsequent bankruptcy filing which occurs within one year of the date of a previous case was dismissed, results in the automatic bankruptcy stay terminating 30 days after filing of the second bankruptcy case. So, there is no rule preventing you from filing within one year, but you will not have the protection of the automatic stay, unless you obtain an order from the court based upon good cause showing why the stay should not expire. Bankr. Code 362(c)(3)(A).

Please let me know if I can clarify anything or provide further assistance.

Hope this helps.
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 34674
Experience: Attorney and Real Estate Broker -- Retired (mostly)
socrateaser and other Bankruptcy Law Specialists are ready to help you
Customer: replied 1 year ago.
OK QUESTION NUMBER 1 ANSWERED. I AM 73 SO AS I ALREADY LOOKED UP THE HOMESTEAD RULES ALLOW ME AN EXEMPTION OF 175K
FROM WHAT I UNDERSTAND I AM RESPONSIBLE FOR THE 1/3 OF MY INCOME TO GO TO REPAYING MY DEBTS, SO 1/3 OF 7500. HOW WILL I KNOW IF THIS WILL BE ENOUGH AS I AM 300K BEHIND IN MORTGAGE DEBT. I WANT TO BE SURE NOT TO RISK MY PERSONAL RESIDENCE. MY ATTORNEY SAYS I WONT BE AT ANY RISK..??

QUESTION #2 MY CONCERN IS IF I DON;T QUALIFY BECAUSE TO MUCH ASSETS ETC AND MY CASE GETS DISMISSED WILL THIS STILL SHOW UP AS A BANKRUPTCY ON MY RECORDS?
Expert:  socrateaser replied 1 year ago.
FROM WHAT I UNDERSTAND I AM RESPONSIBLE FOR THE 1/3 OF MY INCOME TO GO TO REPAYING MY DEBTS, SO 1/3 OF 7500. HOW WILL I KNOW IF THIS WILL BE ENOUGH AS I AM 300K BEHIND IN MORTGAGE DEBT. I WANT TO BE SURE NOT TO RISK MY PERSONAL RESIDENCE. MY ATTORNEY SAYS I WONT BE AT ANY RISK..??

A: Attorneys who handle a lot of Ch. 13 plans usually have computer software into which they can input all of your financial info and tell you whether or not the plan will be approved. There's no way for me to do this in this forum. I would need a huge amount of financial info from you. I suggest that you may want to consider paying a bankruptcy lawyer to provide you with a prospective plan and see exactly what you're likely to pay. That's the best that you can do.

QUESTION #2 MY CONCERN IS IF I DON;T QUALIFY BECAUSE TO MUCH ASSETS ETC AND MY CASE GETS DISMISSED WILL THIS STILL SHOW UP AS A BANKRUPTCY ON MY RECORDS?

A: Individual creditors report bankruptcies in different ways. The discharge will not show up unless you are discharged. But, the bankruptcy filing is practically certain to show up on some of your individual accounts, because creditors can report that a debtor has filed bankruptcy.

Hope this helps.

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socrateaser
socrateaser
Bankruptcy Lawyer
34674 Satisfied Customers
Attorney and Real Estate Broker -- Retired (mostly)