Three Underwater Properties: Can I Keep Them?

[drewmpls]

I am seperated. Three properties, all underwater (mortgage higher than value). My home is exempt under homestead exemption. I am seperated and my wife has her own home (jointly owned by me) that's underwater. My wife and I have an part interest in an investment property (owned jointly by my wife). Investment property is underwater.

If I file a Chapt. 7 individually, can I use my federal wildcard exemption to exempt my interest in my wife's home and the investment property. The properties legitimately have no equity. How would a trustee evaluate this? Could I get all the properties exempt?

[justbroke]

In a Chapter 7... it's all about non-exempt liquid and illiquid assets (those things the Trustee can sell). You don't even need to exempt those properties if they have no equity. They are just not worth anything.

The big question is, why would you keep those underwater properties (if they are underwater by more than 5-10%)? Are you trying to protect your estranged spouse? This really needs to be a business decision.