Can I Keep My Home? How can I decide my best options?

[LandOnMyFeet]

I've got 3 rental properties that are under water (rented), $92K in CC debt, 2 free and clear auto and primary residence with significant equity. I've had a dramatic reduction in income over the past 3 years so I'm right on the border of the Chapter 7 mean test. I mean qualify for the Chapter 7 via a few hundred $$.

Is there any way to keep my primary residence and equity in tact using a Chapter 7 or 13. This is the only asset I have left?

I'm talking with several different attorneys and they all have their own twist based on what they are selling.

Also, what is the best 3 or 4 methods of crunching your own data to see what might be your own best choice of action?

[LadyInTheRed]

LandOnMyFeet, I moved your question to a new topic. It will get more responses that way and avoid changing the subject of somebody else's thread.

[LadyInTheRed]

According to Nolo, the Illionois homestead exemption is $15,000. A married couple can double the exemption. If you have more equity than you can exempt, then your home would be at risk in a Chap 7. You may be able to buy the non-exempt equity from the trustee. You need to discuss that option with local BK attorneys.

In a Chap 13, you can keep non-exempt equity as long as your plan pays unsecured creditor at least what they would receive if the asset was liquidated in Chap 7. In other words, divide your non exempt equity by the 36 to 60 month Chap 13 committment period to determine the minimum monthly plan payment that would be required.

You can Google "online means test calculator" to find one method that will help you evaluate your eligibility for Chap 7 and estimate what a Chap 13 plan payment would be. But, that is a plan payment based on your disposible income. If your disposible income is not high enough to pay for the non-exempt equity, your plan will not be feasible.

The best way to determine your best options is to consult with qualifed BK attorneys who have reviewed your situation in detail. It sounds like you have been on some consultations. Differing advice can be confusing. If you tell us what the different attorneys told you, we may be able to help you understand the reasons for the differing advice.

[LandOnMyFeet]

Yes, we have met with two (2) attorneys and have been trying to educate ourselves through Do-It-Yourself (DIY) activities, Google, Forums, etc. We were told Chapter 7 is not an option since our home has about the same equity as what is owed on credit card debt and it is significantly over the 2X homestead exemption. We have three (3) rentals that are under water for which we have stopped paying the mortgage. Our thought is to sacrifice these rentals, taking the rent to put a good portion toward the credit cards. One attorney told us we could drag out the rental foreclosure for about two (2) years, without filing for bankruptcy, before giving up the property to give us more time to straighten out the credit cards. Another attorney told us file for Chapter 13, period. It puts a concrete bunker over your primary residence, then keep the rentals for two years but we will get stuck with the credit card debt. So without the credit card companies knowing I wanted to see if I can negotiate a debt settlement combo payment plan and/or for the smaller cards maybe just pay it off and try to keep a couple of cards open. Appears bank are already just closing our credit card accounts.