Can my husband and I file seperate chapter 13 to get double the debt limits

[ilovemyfam]

I have more unsecured debt than my husband and we both have the same secured debt that is 1.4 million (5 properties) which included our primary home .. Our primary home is so underwater as all our properties are, but we want to keep the rental properties. My questions is can we file seperate petitions and be allowed to have the allowable amount of unsecured debt and secured debt?... I also thought of surrending our home, but if we did that , we could meet the secured debt limit as the home now would be unsecured, but if they sell for less than owed, that would go over the unsecured debt for a joint filing.... I need to do this soon as I have alot of problems that will happen if I dont ... Any help, would greatly be appreciated.

[AngelinaCatHub]

In Bankruptcy, both peoples income are computed as joint. Even if only one were to file bk, the spouse income has to be included in the formula. It is not simple and your idea is not new and cannot beat the system. I'm sorry to break that to you, but that is the way it is. From your debt you must certainly be able to afford a lawyer and that would be your best bet. I will wager he will say the same. 'Hub

[justbroke]

Why are you filing a Chapter 13? If your primary residence is under half of that $1.4 million (which is about where I just discharged), then you should be able to do a non-consumer Chapter 7. If your primary residence is $1M, then you're probably out of luck on the non-consumer Chapter 7.

[ilovemyfam]

No , my total secured debt is 1.4 million I have a total of 5 properties one being my home which I am underwater to the tune of $200000 and I owe a total of $550000, so If I surrendered the home, it would bring me under the secured debt limit, and I want to keep the other properties, as they are rentals and pay for themselves. If we could file seperately, then we would each have those debt limits and it would help us out,but I think I do need a good lawyer that knows how to do this, but someone lawyers want those easy cases..

[momofthree]

What Justbroke is saying is that since more than 50% of your debt is non-consumer (investment properties), then you could file a joint non-consumer ch.7 which is NOT subject to the means test.

Is there a particular reason that you would WANT to file ch.13? If not, then go the non-consumer Ch.7 route.

[ilovemyfam]

The reason why I am looking at chapter 13 is becuase I am behind on mortgages. I can deal with that, but what is driving me to have to file is that I have unsecured creditors taking me to court , several that I owe over 12000 for each of them and I also had gone thru an IRS audit for returns that have been filed and they will not allow us to take losses on investment properties because they say that I cannot prove that we materially participted in managing the properties, which we did all of it ...so they have assessed $50000 worth of additional taxes due...for returns that are 2005, 2006, now they just adjusted my 2007 and 2008... I just got notification after making a call to make payment arrangements that they filed a lien to secure 2005 and 2006 even though I was trying to make payment arrangements..... I am so stressed out and just want to get relief... I have tried to figure out how this will work... now...

[justbroke]

You can still do a Chapter 20. That would be a Chapter 7 to discharge your unsecured debt, and then a Chapter 13 to cure the IRS tax deficit.

Now, the real question is, since you are behind on mortgages (plural), it reads as though you are not in a positive cash flow situation. You probably need a real good asset protection attorney and a really good accountant. First, you need to make a business decision. You need to figure out if your debt service on all those rental properties is over 1.20:1. If it is not, then you need to be shedding yourself of that debt. Even if you think they are "going" to appreciate and if "only" you could make it through the next 12, 24, 36 months, you are only kidding yourself.

A Chapter 13 with arrears and IRS tax debt repayments, costs a lot of money. Additionally, paying arrears on the investment properties -- if that's the case -- will make the payment extremely high. That doesn't include the calculation of your "disposable" income either. (Noting that if your rental business actually generates income, that could cause even more DMI.)

Very intricate. Very intricate. You need a combined asset protection and bankruptcy strategy.

[AngelinaCatHub]

The reason why I am looking at chapter 13 is becuase I am behind on mortgages. I can deal with that, but what is driving me to have to file is that I have unsecured creditors taking me to court , several that I owe over 12000 for each of them and I also had gone thru an IRS audit for returns that have been filed and they will not allow us to take losses on investment properties because they say that I cannot prove that we materially participted in managing the properties, which we did all of it ...so they have assessed $50000 worth of additional taxes due...for returns that are 2005, 2006, now they just adjusted my 2007 and 2008... I just got notification after making a call to make payment arrangements that they filed a lien to secure 2005 and 2006 even though I was trying to make payment arrangements..... I am so stressed out and just want to get relief... I have tried to figure out how this will work... now...

Yes, it's time for a lawyer. Once you get a bk docket, the IRS will halt all action. You can then negotiate a payment plan and they should lift your lien. They threatened me on that, and I set up payments. When I filed the IRS told me to stop all payments. When I got my discharge, I got another threat so I set up payments and things are just 'ducky' now. Down to only 17K owed them. 'Hub

P.S. with your complications, it is too important not to get an attorney. You have some tangled problems that must be addressed and proven in some way. If you have to, for peace, you might consider just letting it all go, recover what you can and start fresh. The amount of worry and stress I detect is going to get worse before it gets better. Get more information as then you can study the practicals of bk, what kind of bk, and what you can come out with. 7 is a full liquidation so understand that. 13 is indentured servitude in my opinion. I'd rather go with a new start, but that was our decision and I cannot make that for you. Do what is right for you.

[ilovemyfam]

Thank you so much for all your input... I have reasons why I cannot give up the other properties,my mother n law lives in one and my children each live in one of them, and I am having a hard time with having to make them leave. I want so bad to find someone to help me as I have gone to several attornies and the ones I have gone to are just ones that want easy cookie cutter cases. I wish there was a way of finding one of those attornies is not affraid to take on a case like mine...

[justbroke]

I have reasons why I cannot give up the other properties,my mother n law lives in one and my children each live in one of them, and I am having a hard time with having to make them leave.

Let me tell you this. One of my investment properties had my brother and his family in it. This is what drove me to bankruptcy... supporting that property. You will take everyone down with you if you don't take the emotion out of the equation and start making smart business choices. I even had to send my brother a Notice to Quit/Vacate because the Trustee wasn't going to like that he was living there paying 1/2 of the mortgage. (Okay, so now my story is out!)

I wish there was a way of finding one of those attornies is not affraid to take on a case like mine...

You could, but you will need to pay a lot more in fees. In most Districts, including mine, there are what they call "no look" fees. For difficult cases, they can charge more but have to submit fee applications. They don't want to be held out to dry if their fees aren't accepted. There are surely bankruptcy attorneys that specialize in what is really a non-consumer filing, but it will cost you $$$$.