Going through bankruptcy does not mean that you have to give up everything. There are ways to keep many of your assets after going through the bankruptcy process, and that can include your rental property. However, it’s important to know the differences between the types of bankruptcy and whether you have the income necessary to make a payment plan for your creditors. A Montgomery County Chapter 13 bankruptcy lawyer may be able to help you figure out your best option.
Is it Possible to Keep My Rental Property?
It is possible to keep your rental property if you go through bankruptcy. If you are behind on mortgage payments there may be a way to work out a plan and keep this potentially growing asset for yourself. Not every bankruptcy filer can keep their rental property though.
Does the Kind of Bankruptcy Matter?
The biggest determinant here is what kind of bankruptcy you file for. If you do not have enough money to make a payment plan with your creditors, you need to file for Chapter 7 bankruptcy. This requires you to sell off a lot of your assets. There are exemptions though.
Will these exemptions allow you to keep a rental property? Probably not. While you may be able to emerge through the Chapter 7 bankruptcy process with your residence and some other key assets intact, it’s unlikely that you will be able to save a rental property in this way. There is not a specific exemption for it in state or federal rules, and even the “wildcard” exemption is unlikely to be enough to cover a rental property.
How Does Chapter 13 Bankruptcy Help Me Keep My Rental Property?
This means that you have to file for Chapter 13 bankruptcy if you want to keep a rental property. You can file for Chapter 13 bankruptcy when you have a high enough wage to fulfill a three-to-five year debt repayment plan. If you are behind on payments for your rental property, these can be included in your repayment plan.
Then you just need to continue making payments on time. As long as you do that, you should be able to keep your property.
Do I Need an Attorney?
We recommend that you talk to a lawyer when you are considering bankruptcy. It’s a complicated process with a lot of paperwork to do, and any mistakes could take a lot of time to fix. A lawyer can also advise you on the intricacies of the different types of bankruptcy so that you can pick a method that works for you.
Contact Our Bankruptcy Lawyers Today
Bankruptcy can be confusing, but we’re here to help guide you through it. Contact Mudrcick & Zucker to schedule a consultation and learn more about this process. If we can help you save any of your assets, we’ll do it.
