4 properties and in a mess - how to 7???

[Itried]

Hello out there,

I am in a true mess!

Here is also a snapshot of my situation (a little long, but I need someone to talk to):

I want to file a Chapter 7 if possible. I have $1.2million in secured debt (mortgage and car) and $20K in unsecured credit card debt. I make about $75K per year and I am single and no dependants (with a crazy entrepreneurial spirit - no LLC).

Monthly debt is about $10K and I bring in about $8K before taxes, including rental income. I have two properties in CA. CA - 1 going to foreclosure soon, other current and rented, but mortgage is adjusting soon. Also there are 3 properties in GA. - 1 primary (current) and 2 rentals 1 OK rented, current and breaking even and other is 3 months late and empty). There is little or no equity in none of the properties, even in my primary residence. I may be negative CMV on some of the properties in CA.

I of course would like to file a chapter 7 and be done, but I have read a few forums and this may or not be possible depending on the attorney that I select. I have met with a few that don't have it down and they scare me into a Chapter 13, I say no I would rather foreclose and see what happens. I can only image having to pay $1,300 a month to pay back defiency balances on $78K over the next 5 years.

I have been following several threads in the past few days and if Busbis, Bosco or uofaguy are reading this post please provide me with some words of advise, websites of attorneys, article info and any other stories that you feel that may help. It seems like all of you are in or was in a similar situation. I also want advice of others that may have been in this situation and have been successful at doing a chapter 7 under these curcumstances.

Some lawyers say that I can do a 7 easy do to my expenses and debt leave me at a negative every month, but if I liquidate everything, except primary and car I will have much excess after the BK. I guess I am scared of the new BK laws and hesitant to file.

Please help.

Thanks,
Itried

[SinkingFast]

For the properties in Georgia,............ Lenders can seek deficiency balances against you. California,.......... It's gonna depend on the type of mortgage you have.

http://stopforeclosure.com/Georgia_Foreclosure_Law.htm

http://www.foreclosurelaw.org/Califo...losure_Law.htm

A lot of people with mostly non Consumer debt are having similar problems finding attnys to file a Ch 7 for them. This type of BK probably falls outside the expertise of many attnys. Especially BK Mill attnys.

You might have to be prepared to pay some big bucks to retain a Hired Gun.

Possibly look for a Creditor's Rights attny who also practices BK Law. Or maybe a Real Estate Law attny who also practice BK Law.

[uofaguy]

Itried -

Sinkingfast is right in that many BK attorneys have no idea about your situation and will look strictly at your income and automatically attempt to push you to a Ch. 13. The problem is, a) you very well may qualify for a Ch. 7 if the majority of your debt is business/investment debt. Based on the number of properties you cite, I'm assuming that is the case. b) Beginning April 1, 2007, the eligibility debt limits for Chapter 13 are $336,900 for uncontingent, liquidated, unsecured debts and $1,010,650 for uncontingent, liquidated, secured debts. This means that at this point in time, you cannot qualify for a Ch. 13 as your secured debt is > $1.01M. You would have to wait until one or more of your properties foreclosed.

From everything I have read, having a foreclosure and a BK on your credit is much worse than just a BK. I've been advised by a few attorneys to file BK before foreclosure so that the homes are listed on my credit as Included in Bankruptcy (IIB). I know a few people in our situation that are allowing their home(s) to foreclose and hoping the banks will not pursue a deficiency judgement against them (if allowed to by that state law). I tried working with my banks (e.g. short sales and deeds in lieu) but was not successful. In fact, the second mortgage holder on my home actually told me they would pursue a judgement. You may want to have a dialogue with the banks, but given the number of properties and likely banks involved, you may be wasting your time.

I recommend that you meet with a few more BK attorneys ASAP. However, be certain to choose only BK attorneys that specialize in business BK. One idea is to search your state Bar's website and identify attorneys that are certified BK specialists (if applicable in your state) and then see if they have a website. From their site, you should be able to tell if their focus is Business BK (e.g. Ch. 11). I have found that these BK attorneys tend to charge more (e.g. 2 to 3x an attorney focused on consumer debt).

Good luck.

[Itried]

I found someone that can do the 7 for me

Hi all,

After meeting with about 3 Attorney's about my situation, finally one referred me to a Business Lawyer that is going to put me into a Chapter 7 - Business!!!!

I am pulling all of my information together now and I should be good to go. Hopefully I can file before the forclosure and get this behind me and look forward to rebuilding in 08.

Thank you all for the great advise. I don't know where I would be without this forum. I am addicted and I admit it.

[Birn]

ITRIED,

I'm in a similar situation. I have 5 rental properties to unload and my attorney has also recommended Ch7 Business. My question is what happens to the rental income after you file BK? What about after the BK is discharged if the banks haven't yet completed their foreclosure? Does the rental income automatically go to the trustee? If it does, then does the trustee pay for all the maintenance and property management expenses?

All of my properties have serious negative equity and the trustee would be wasting his time trying to liquidate them.

I appreciate any advice or direction. This forum has been a tremendous resource for me.

[kiddles]

Honey - you aren't eligible for a chap 13. Your debt is too high - there is a limit for a chap 13 (but not for a 7).

If the trustee tried to push you into anything, it will be a chap 11 - which is the chap 13 version for businesses, but is used by individuals with massive debts.

We are about 30% over the median income (but pass the means test) and had so much debt that we were ineligible for a 13. Some "experts" said that automatically qualified us for a 7, some said we might have to go 11.

We had our 341 today for our 7 and had no troubles.

Interestingly, a friend in another state has right at median income, huge debts, filed a 7 and is fighting being pushed into an 11. YMMV.

Either way, however, you arent eligible for a 13 and any BK attorney should know that.