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Im half owner of an investment rental property. The other

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I'm half owner of an...
I'm half owner of an investment rental property. The other investor is declaring bankruptcy. We are both on the loan and current on our payments. However
Submitted: 7 years ago.Category: Bankruptcy Law
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9/1/2010
Bankruptcy Lawyer: DCrane Law, Attorney replied 7 years ago
DCrane Law
DCrane Law, Attorney
Category: Bankruptcy Law
Satisfied Customers: 25,285
Experience: Experience in this area derives from assisting corporate clients in complex restructurings.
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Thank you for the post, it appears a portion of your post was omitted however. In any event, what legal question can I answer for you?
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Customer reply replied 7 years ago
I'm half owner of an investment rental property. The other investor is declaring bankruptcy. We are both on the loan and current on our payments. However, he has decided to stop paying his portion and stopped paying the HOA's which might have created a lien on the property. I can continue paying the mortgage by myself for a few months, but then what will happen to the property, my assets, and my credit when he declares bankruptcy and I can no longer pay? Basically what are my options to get out of this situation without ruining my finances? The property is $60,000 negative equity. So if the house gets forclosed on can the bank come back to me for the deficeincy. Would a deed in Lieu of forclosure or a LLC help me? Thanks for your help
-Scott
Bankruptcy Lawyer: DCrane Law, Attorney replied 7 years ago
Thank you Scott, if the HOA has placed a lien on the property, that will further encumber its sale or transfer, and in the event of a foreclosure, the bank will satisfy the lien if there is any surplus from the sale/auction after paying off the mortgage and fees. If there is a deficit, the mortgage company and the HOA will come after you for payment (seeking a deficiency judgment). If the property is owned by a business (and not personally guaranteed), the creditors recourse would only be against business assets. If you have not already set up the investment property such that it is owned by a business entity (e.g. LLC, Inc.) it is too late to do so now.
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Customer reply replied 7 years ago
So Basically I have no other options but to continue to pay on the mortgage? Or Negotiate a short sale with the bank.
If he has not declared Bankruptcy yet, would it still be too late to set up the property in a LLC?
Bankruptcy Lawyer: DCrane Law, Attorney replied 7 years ago
Yes, it would still be too late because the bank would have to approve the transfer. If possible try to negotiate a modification or short sale.
DCrane Law
DCrane Law, Attorney
Category: Bankruptcy Law
Satisfied Customers: 25,285
Experience: Experience in this area derives from assisting corporate clients in complex restructurings.
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