Have 4 homes need help

[253BK]

Hi guys and gals I am new to the forum and have some questions!

First we own 4 homes one of which we live in and the 3 others are all rented out. I work in real estate and had made about 165,000 this year but havent had such luck in the last 5 months! My question is we will be able to keep our home we live in that has about 40K equity?

And as of right now we are current but I will not be able to make this months payments since they are upto 17,000 monthly how long will this process take?

Also my laywer mentioned having to wait until Jan 2008 to file since I had such high income is this true???

Thanks for all your time hope to find some answers on here

[keepmine]

We need your state and family size before we can answer.

[253BK]

We live in Wa state and it is just me and my wife!!! Thanks for your help

[HHM]

You probably will have to wait as the BK code looks at your last 6 months of average income to determine whether you are above or below the state median income.

But let's back up...what is your intentions with the rental properties (i.e keep them, let them go, etc).

Since you are in real estate, I will assume the equity amount in your home is accurate, but in this market, most peoples estimation of their home value is wishful thinking. Looks like the Home equity exemption in WA is $40,000 so you should be ok in that regard, thus, you can probably keep your house.

[253BK]

The rentals are all going back or short sale on each of them! The last 6 months have been bad with hardly any income and tons of bills! the 40K in equity would be if I was to sell the house on the market minus the realtor fees and closing costs right? we owe 609K and it is worth 650 maybe in todays market but would sit for ever so I am hoping we are safe!

My other question is we are keeping both of our cars and all credit cards do I just keep paying all the bills I plan on trying to keep???

HHM thanks for all your help

[SinkingFast]

Just curious here, but,........... Why would you want to Reaffirm Credit Card debt??

[253BK]

To keep the accounts since I have had them for over 10 yrs I figured that would help my socres go back up after!!!

Another thing that comes to mind is the home we want to keep has renters in in now should I stop paying the payment until after we file then reaffirm the account with country wide???

[B12]

You work in real estate, so you know that credit rebounds in a few years after a BK, especially when you had good credit for years. Take the credit score out of the equation and do what you have to for financial relief.

How bad is the credit card debt?

If it is high, foreclose on the rentals, use the equity exemption for your house, use the money you would have paid cc's with to reaffirm the rental you want to keep.

Bankrupt the cc's and foreclose on the rentals you want to ditch. Short sales have tax ramifications IF the lender even agrees.

Wait a few months until your 6 month income is lower, and stop paying the credit cards. Keep up the two mortgage payments and car only.

Keep the properties insured until the deeds are out of your name.

[freshstart06]

Let the credit cards go, do set up red flags that can help point you into chapter 13. you make a lot of money for just two people and they will look at previous tax years depending on your trustee or if you get audited. If you let everything go then it would look more like you are having 'hardship" but picking and chosing what you want to keep will put you right into chpt 13

[253BK]

I thought in a Chapter 7 you could add credit cards in right now I only have about 7500$ in debt on my cc's should I go shopping then file in a few months???

I am affraid to quit paying those cards and just the houses. I cant swing the houses my renters arent paying and leaves me out of alot of cash!

[253BK]

The big question is when should I file as of Nov. 1st I will be late on 3 of the 4 mortgages but current on my cars and cc's let me hear your thoughts...

THanks for all your help everyone this is a crazy time in my life PLUS I am turning 30 in a month LOL

[SinkingFast]

There's no guarantee that any of your CC's will survive BK. Even if your reaffirm the debt, the Creditors could "Close" the accts to future use and simply allow you to pay back what you currently owe.

We had 3 Zero balance accts going into BK and only 1 survived. The other 2 were closed by the Creditors before our 341 was held.

And, NO!! Do not go out shopping and charge up a bunch of stuff. Talk about waving a red flag in front of 2 bulls. The Trustee and the Creditors will both be on you.

Stay current on the things you wanna keep. If you plan to keep your cars, make those payments.

I saw in another post you intend to move into one of your Rentals in 3 weeks. That will become your primary residence. If you want to keep that house, keep those payments current as well.

Foreclosure does not happen over night. Generally speaking, after the grace period of your 2nd, sometimes 3rd missed payment, you'll get a Notice of Default and Acceleration. That's the "pay up or else" letter from your Lender(s). You'll probably be given 30 days to bring your accts current before the actual Foreclosure process begins.

A lot of how quickly your Lenders will move depends on their balance sheet and your market. If the Lenders are carrying a lot of REO properties, they may not move to Foreclose on you so quickly. Lots of REO properties do not look good to prospective investors. If there's lots of Foreclosures in your market, the Lenders may let you ride a while.

You're gonna be playing a "Wait and See" game with the Foreclosures.

[ssdsco]

253BK,

FYI, My attorney advised me to check with an accountant on the tax implications and timing of bankruptcy and foreclosure. He was concerned there may be a possibility I'd lose the "basis" for the foreclosed home and loss carry forward. From the last payment I made until I would be booted out of the house I could have collected a years rental income according to my real-estate agent. That's in MD.

You'll need a cash and carry post BK budget, get a good understanding of your assets versus your BK exemptions, and do the work to get a good BK attorney. Lots of good advice in the forum.

[253BK]

See that is what I am thinking the rentals will pay up and if I collect for 4-6 months at 4500$ monthly I can build a good cash reserve since I will be paying with cash for at least 2 years from here on out!

As far as the market around here it is bad tons of foreclosures PLUS the one company that is most affected we have all the loans through (country wide) might be a plus!

I think we will wait until Jan or Feb 2008 to file and ride this out as long as possible I figure if I am going down I will go down hard!!! I have had a 780 credit score for years and bought and flipped tons of homes this is going to be a real kick in the ass!

[ssdsco]

Keep in mind if you're going BK7 you'll be handing any cash reserves that aren't exempt over to the trustee. You probably know this but that will also be counted as income.