Keeping rental property through bk ch 13

[Brokester]

Hello i am new to this thread and I am in massive unsecured debt over 60K. I have a rental property that will rent but will not sell. I have a first mortgage and then a heloc. My income is just slightly above the median here in new york. Will i be able to go through a chapter 13 and keep my rental property? How much will i be subject to pay back the unsecured creditors? There is equity but it is very little just under 15K if that I have not had it appraised recently. The rental income when it is here is just enough to cover the mortgage. I am afraid to do a ch 7 because i do want to purchase a home in the next few years and dont want a mortgage IIB. Especially because it is a VA loan. Please give me some insight I am 4 months behind on all CC's and I am afraid of lawsuits. Help!

[HHM]

Go see some BK attorneys.

You will first want to determine if there really is equity in the property, if it won't sell, odds are it doesn't. Get a Realtor to give you a current market analysis.

Although I understand your goal about buying a house, a chapter 7 is not a death sentence to that goal. The problem you will run into with a chapter 13 and rental property is that you will not be allowed to budget your personal income to make-up any short fall in the rental. The rental MUST pay for itself. Generally, if there is no equity in the rental property and you would otherwise qualify for a chapter 7, a chapter 7 is the better long term option; unless the rental property is significantly underwater and you can strip off the 2nd mortgage.

[Brokester]

I just spoke with my attorney...

I just spoke with my attorney and he gave me the same advice you gave me thanks! my other question is how do they determine how much equity is involved in the rental? Lets say I owe 106000 combined (mortgage and heloc) and it appraises for 128000, does the trustee factor in closing costs and other costs as if he were to sell it for a chapter 7 or does he look at the 22K of equity without a sale reducing the final payout with closing costs etc... Thanks again I am very confused and very worried because I do not want to lose this property through Bankruptcy because the VA will bar me from ever obtaining a mortgage from them in the future.