Hi,
I have a few questions about Chapter 13 and Investment Properties and whether or not a 13 would be wise for me to pursue as opposed to a Chapter 7.
1. I have 5 Investment Properties that I want to give up. Some are underwater, some are worth about what is owed if appraised. The only unsecured debt I have is a $40k line of credit. Since it is all business debt, I can file for a chapter 7, but am considering a 13 for various reasons. So how would the properties be handled in a Chapter 13? The debt on the mortgages is about $600k, so if i filed a 13 would the lenders presumably file both a secured AND unsecured claim, then amend their claim based on the actual deficiency? When I file would I list any unsecured part of the debts or attempt to surrender in full satisfaction? Is there any chance i could get through a 13 only paying the $40k unsecured? If that were the only debt i would pay it in full and move on with life.
2. I would be filing individually (without my wife). While i know her income is related to the repayment plan, how else would it effect her? For instance can she save money in her solo bank account, accept gifts, get inheritances, etc without the payment going up? As long as her pay doesnt' go up and mine doesn't either, would the payment presumably be the same with little monitoring as long as the checks get to the trustee in time?
3. Scrutiny. The reason that I am considering a 13 is b/c i have some shares of a family business (only 3%), i also have a web design company (i simply freelance) but have ceased activity to deal with this and so i don't show that income coming in. It is my second job and they can't make me bust hump doing that to pay them. My father helps me with the design/marketing and he has an LLC, I am considering starting to do the work under that LLC and he can pay me a small amount for my work. My fear is that in a 7 they might really look at my activity more....is it true that in a 13 there is far less scrutiny since you are attempting to pay back a portion of the debt?
4. Finally, what happens if, after the deficiencies come in (assuming they all make claims for them)...the unsecured debt is pushed over the 13 limits after i've already been confirmed and started payments? Not sure what they'll bring at foreclosure sale, now they are close to value probably if appraised, but after getting emptied out, getting boarded up, pipes busting, etc....who knows? How is this handled.
5. Inhertances coming my way? My grandfather is getting sicker by the day...and he is leaving me $25k. I know for sure that if he passed and i did a 7 I would lose all of that...but how about a 13. I've heard several different opinions. A couple of attorneys said it wasn't "disposable monthly income" so it isn't applicable. Another said if i received an inheritance i would be the first person EVER to tell him in a 13. I'm not trying to defraud the BK court, I'm just wondering what the laws are in this matter, and if a 13 woudl protect part or all of the inheritance.
6. If I am primarily business debt...do i need to do the means test for a 13 or just I & J? being business debt, I know in a 7 they don't hassle you as much on your expenses, but how about in a 13. Does that change or would my plan be more likely for confirmation "as is" since it is a business BK?
Sorry for the long email but i'm looking for some advice and help
Thanks
John
I have a few questions about Chapter 13 and Investment Properties and whether or not a 13 would be wise for me to pursue as opposed to a Chapter 7.
1. I have 5 Investment Properties that I want to give up. Some are underwater, some are worth about what is owed if appraised. The only unsecured debt I have is a $40k line of credit. Since it is all business debt, I can file for a chapter 7, but am considering a 13 for various reasons. So how would the properties be handled in a Chapter 13? The debt on the mortgages is about $600k, so if i filed a 13 would the lenders presumably file both a secured AND unsecured claim, then amend their claim based on the actual deficiency? When I file would I list any unsecured part of the debts or attempt to surrender in full satisfaction? Is there any chance i could get through a 13 only paying the $40k unsecured? If that were the only debt i would pay it in full and move on with life.
2. I would be filing individually (without my wife). While i know her income is related to the repayment plan, how else would it effect her? For instance can she save money in her solo bank account, accept gifts, get inheritances, etc without the payment going up? As long as her pay doesnt' go up and mine doesn't either, would the payment presumably be the same with little monitoring as long as the checks get to the trustee in time?
3. Scrutiny. The reason that I am considering a 13 is b/c i have some shares of a family business (only 3%), i also have a web design company (i simply freelance) but have ceased activity to deal with this and so i don't show that income coming in. It is my second job and they can't make me bust hump doing that to pay them. My father helps me with the design/marketing and he has an LLC, I am considering starting to do the work under that LLC and he can pay me a small amount for my work. My fear is that in a 7 they might really look at my activity more....is it true that in a 13 there is far less scrutiny since you are attempting to pay back a portion of the debt?
4. Finally, what happens if, after the deficiencies come in (assuming they all make claims for them)...the unsecured debt is pushed over the 13 limits after i've already been confirmed and started payments? Not sure what they'll bring at foreclosure sale, now they are close to value probably if appraised, but after getting emptied out, getting boarded up, pipes busting, etc....who knows? How is this handled.
5. Inhertances coming my way? My grandfather is getting sicker by the day...and he is leaving me $25k. I know for sure that if he passed and i did a 7 I would lose all of that...but how about a 13. I've heard several different opinions. A couple of attorneys said it wasn't "disposable monthly income" so it isn't applicable. Another said if i received an inheritance i would be the first person EVER to tell him in a 13. I'm not trying to defraud the BK court, I'm just wondering what the laws are in this matter, and if a 13 woudl protect part or all of the inheritance.
6. If I am primarily business debt...do i need to do the means test for a 13 or just I & J? being business debt, I know in a 7 they don't hassle you as much on your expenses, but how about in a 13. Does that change or would my plan be more likely for confirmation "as is" since it is a business BK?
Sorry for the long email but i'm looking for some advice and help
Thanks
John