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BANKRUPTCY: 1. What happens to a home based-business (Travel…

BANKRUPTCY: 1. What happens to a...
BANKRUPTCY:
1. What happens to a home based-business (Travel Agent) in Personal bankruptcy, Chapter 7?
2. Can debtor keep a Rental property (Wife only Mortgage) along with their primary residence(Husband only Mortgage)? Debtors are filing a Joint Chapter 7 bankruptcy.
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Answered in 7 minutes by:
11/4/2017
socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 40,074
Experience: Attorney and Real Estate Broker -- Retired
Verified

Hello...you asked:

1. What happens to a home based-business (Travel Agent) in Personal bankruptcy, Chapter 7?

A: If the business is entirely service-based and has no assets that can be liquidated to pay debts (e.g., real estate, or valuable equipment), then the bankruptcy trustee will generally "abandon" the business back to the debtor at the close of the bankruptcy, and it will remain as the debtor's sole property.

2. Can debtor keep a Rental property (Wife only Mortgage) along with their primary residence(Husband only Mortgage)? Debtors are filing a Joint Chapter 7 bankruptcy.

A:

Rental property: If it has equity value above the mortgage balance, then the bankruptcy trustee can sell it to pay debts.

Primary residence: The first $29,675 is exempt from seizure. Any other equity above mortgage value can be sold off by the bankruptcy trustee to pay debts.

However, if only one spouse files for bankruptcy, and the properties are held on the deed as "tenants by the entirety," and only one spouse is the actual debtor outside of bankruptcy, then any property held "by the entireties" cannot be sold to collect a debt.

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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 40,074
Experience: Attorney and Real Estate Broker -- Retired
Verified
socrateaser and 87 other Bankruptcy Law Specialists are ready to help you
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Customer reply replied 8 months ago
Another question: Can the debtor continue to do business and generate income, during the open bankruptcy process?

Yes. Absolutely.

Note: If you have additional questions, please open a new Q&A session, so that the contributor who answers can receive adequate compensation for his/her additional efforts in your behalf.

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DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

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