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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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In the state of Georgia, If I own multiple investment properties

Resolved Question:

In the state of Georgia, If I own multiple investment properties can I file a chapter 7 just on the properties that are not producing enough income to sustain them or make the monthly mortgage payments, therefore continuing to own the remaining profitable properties without ill consequencies?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.

Hi JACustomer,

1) Are you asking about a business Bankruptcy or a personal Bankruptcy?

2) What business form do these properties have (corporation, LLC, etc.)?

3) Are these properties separate businesses, or are some owned by the same business?

4) Do the profitable properties have equity? That is, can they be sold for more than the balance - if any - on the mortgage(s)?

5) If they do have equity, how much equity do the properties have?

Sorry, but I may have a few more questions, depending on the answers to these.

Customer: replied 6 years ago.

1) it is a personal bankruptcy

2) not a corporation...personal rental properties

3) All owned by one person or financially responsible although spouse name is XXXXX XXXXX she is not responsible for the debt.

4) None of the properties have equity now. purchased in 2004/5 prior to the market collapsing. All market values now are less than 40% of the value at purchase.

5) 0 equity, all are upside down.

Expert:  cfortunato replied 6 years ago.

If you file a Bankruptcy, you have to account for all of the properties in the petition.

However, you would be able to keep any of the properties that you are able to pay the mortgage for - as none of the properties has any equity.

A Bankruptcy can discharge your liability to pay those mortgages - which means the lenders cannot get a deficiency judgments if you do not pay - but if the mortgages are not paid, the lender can foreclose.


I'm not sure if this is what you wanted to know. If not, please let me know.

Thank you!


Customer: replied 6 years ago.
If the lender foreclose before the Chapter 7 is completed then does the dynamic change as far the liability to pay the mortgage. In other words if the lender foreclose on the properties then the debtor files for the Chapter 7 can it adversely effect the bankruptcy filings?
Expert:  cfortunato replied 6 years ago.
If the foreclosure happens before the Bankruptcy is filed, and if the lender has already gotten a deficiency judgment, the Bankruptcy would be able to discharge the judgment. Otherwise, a foreclosure beforehand would have no affect on a Bankruptcy.
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