Do you think I can qualify as a Non-Consumer Chapter 7?

[StrawberrySu]

My ability to file non-consumer chapter 7 hinges on what the court thinks of the status of my rental property. One was purchased as investment (even tho in actuality was for daughter and granddaughters to live in), the second was our primary residence. We bought it in 2005, then rented it in 2009. I have classified it as a rental on 2009 & 2010 taxes.

I am not basing it's status as non-consumer on that, tho. My research has led me to believe that it is the "intent" of the mortgage that determines if it is non-consumer or not. We have a rental application dated May of 09, refinanced into a VA loan (because it was the only way we could refi and rent immediately) on 6/08/09, and signed lease beginning 7/1/09 on 6/11/09. So it should be clear that the intent of the mortgage refi was to rent the property. Or am I just wrong on that?

As long as the second rental will qualify, I am way over the 51%. Anyone with any advice or thoughts? Thanks!

[newbie2]

I'm a bit confused, but I do wonder this: The VA loan that you have for the refinance -- did they have you sign something stating that it is a primary residence loan? (My understanding is that VA does not lend for investment purposes, but for primary residences only.)

[StrawberrySu]

I'm a bit confused, but I do wonder this: The VA loan that you have for the refinance -- did they have you sign something stating that it is a primary residence loan? (My understanding is that VA does not lend for investment purposes, but for primary residences only.)

Hi Newbie2! Well, I think the thing is VA doesn't make the original loan for investment purposes. We checked a box on the loan papers stating we did not intend to live in the property when we did the refi. In fact, it was much more expensive to use our VA loan, it added about 5k, I think to the closing costs because of the VA funding fee we had to pay. But it was the only option to refi and then immediately rent the property. The reason for refi was to get the payment low enough to get a renter, we reduced it by $200 a month with the refi.

[newbie2]

You should have been given a copy of everything you signed at that closing. Dig the papers out, that box you checked could be helpful to you in proving the intent all along to use this home as a rental.

[StrawberrySu]

You should have been given a copy of everything you signed at that closing. Dig the papers out, that box you checked could be helpful to you in proving the intent all along to use this home as a rental.

It was not our intent "all along" to use the property as a rental, just our only avenue when the market dropped out from underneath us. So if I knew how the court would look at it, I would rest easier!