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can we keep the rental property and loose the primary residence instead in a chapter 7?

Posted on: 23rd Apr, 2009 01:08 pm
We live in MN. Some background: We own a rental property that we are current on. Due to business problems and husband's long term unemployment we are very behind on our primary house mortgage. We tried to work out a modification(they promised they'd give us one and it would $350 less than original loan, but instead the bailouts happened and it became $350+MORE than the original.) (A HUD conselor was also unable to re-negotiate pmts.) With the business we have a lot of debt that we've been trying to pay down, and actually, did pay a good portion down! (the debt is on personal and business credit) My question is, at this point, from what I understand about bankruptcy, there is no way to do a Chapter 13, and keep my primary house, cause I still have to keep up with the payments, and they are almost as much as my monthly take home, and I'm the only $ source, so we would loose the house anyway. We make way less than the means test requires, so we could file chap. 7, but my question is, I know you get to keep one house...could we keep our rental property, since it is current and worth more, or does only your primary property come into consideration on a chapter 7? ONe more thing...my other thought is to just let the forclousure happen...we do have a few decent assests (tools and the rental) and I am also in the middle of a personal injury insurance settlement, which I know would be taken away if we filed bankruptcy.
Thanks for any thoughts/help.
Hi receptionist,

As far as I know only your primary residence, apart from certain other types of assets, is exempted in chapter7 and a rental property does not fall in the category of exempt assets. Instead of a chapter 7, you can let the foreclosure happen on your primary home if you are not keen on keeping it.
Posted on: 23rd Apr, 2009 11:03 pm
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