How are investment properties handled in chapter 7

[jonance]

Hi,

I have 5 investment properties...some of them are underwater by alot, some not as much. I'm planning to file in 6 months or so and will stop making payments this month....ready to let them go. My question is, when i file, if they haven't been sold at auction (they won't by then)...how do i account for the unsecured part of the claim. In a deficiency judgment, they take the difference, plus attorney's fees, plus accelerated interest, etc. When I file how would i break down the secured and unsecured portions? I will be filing as non-consumer since they are investment properties, and am wondering how that works with the timing of the filing.

[liboton21]

I also got a lot property in CA and out of state, I will include them in BK7 but how do I appraised them? Most of the online appraisal were for home like zillow and cyberhomes, can I use the county assessment? Or does anyone know for lot appraisal?

[BobMango]

I also got a lot property in CA and out of state, I will include them in BK7 but how do I appraised them? Most of the online appraisal were for home like zillow and cyberhomes, can I use the county assessment? Or does anyone know for lot appraisal?

I had to get a local realtor to do a market analysis on my California property. Just called one up and a few days later I had the number.

[jonance]

Are you surrendering investment properties...or is it your primary? My question if really about how i can stay a primarily business bk with the following:

$180k loan on primary residence

$600k loans on investment property (5 properties)
$40k line of business credit for investments

However if i file before a sheriffs sale, how do they look at that. Clearly it is primarily business debt, but does the "primarily" have to be the unsecured portion? Technically i have $0 unsecured debt on my primary b/c it is worth $240 or so. Anybody have experience with this? Any advice on timing of when to file. I'm just trying to get rid of these dag blasted properties.

[BobMango]

Are you surrendering investment properties...or is it your primary? My question if really about how i can stay a primarily business bk with the following:

$180k loan on primary residence

$600k loans on investment property (5 properties)
$40k line of business credit for investments

However if i file before a sheriffs sale, how do they look at that. Clearly it is primarily business debt, but does the "primarily" have to be the unsecured portion? Technically i have $0 unsecured debt on my primary b/c it is worth $240 or so. Anybody have experience with this? Any advice on timing of when to file. I'm just trying to get rid of these dag blasted properties.

It was investment property I was surrendering in California, I live in Washington and New Mexico.

You should be able to do a ride-thru on your primary or a reaffirmation (but those are generally frowned upon for a number of reasons.)

If you are planning on letting the properties go then the debt associated with them should go as well.

Your other option would be to just let the sheriff's sale go through if you are planning on filing BK either way. I'm not sure how much difference it makes to lose a property through foreclosure or let it go in the bankruptcy. By filing bankruptcy you are deemed to be insolvent and so not liable for the taxes on any 1099s you might receive.

I'd definitely talk to some lawyers and perhaps some tax experts as well to help you decide on the best approach for you.