I own a home in another state that I was renting to my niece while I work my temporary travel jobs out of state. My niece moved out and I lost that income now I have to pay the mortgage and utilities on an empty home as well as pay rent and utilities on an apartment that I am leasing while working my temp jobs out of state. I have high credit card bills only paying the minimum payment each month. With the loss of the income from my niece I am no longer able to pay all of my bills I am at least a negative 400+ dollars a month. I have put my home up for sale if it sells at the current listing it will just be enough to pay off the mortgage and closing realtor fees etc and will not gain a profit. Can I file bankruptcy with my home for sale?
Chapter 7 Bankruptcy Attorney
You can file bankruptcy while still maintaining a listing to sell real estate but the bankruptcy trustee and the judge will have to okay any sale, which may delay the closing of the sale.
Hope this perspective helps!
Juvenile Law Attorney
You can sell your home, with approval from the bankruptcy trustee and the Judge. Or, you can retain the property under a homestead exemption and sell the property after the bankruptcy (which does not require approval from the trustee and judge). In either case, you can likely retain some or all of the proceeds of the sale if it's the only home you own. Check this website for more specific information on the homestead exemption in the state where your home is located: http://thismatter.com/money/credit/bankruptcy/chapter-7/homestead-exemption.htm
Further legal authority on exemption for proceeds of a sale, if you're interested....
The United States Court of Appeals for the First Circuit recently held In re Cunningham, 513 F.3d 318 (1st Cir. 2008) that the proceeds of a sale of exempt property retained exempt status. The Court cited 11 U.S.C. 522(c) which states that “[P]roperty exempted under this section is not liable during or after the case for any debt of the debtor that arose … before the commencement of the case, except [for certain debts, such as tax and child support
obligations].” Highlighting the “after the case” language and the noting limited exceptions, the Court extended the protection of the exemption to the proceeds of the sale of the home.
Best of luck to you.
Sounds like a chapter 7 would work for you. It would get rid of the credit card debt, and you could surrender the home and let the listing agent know the lender will be taking over. You do need to seek counsel, as the exemptions available to you may be limited depending on how long you have been in your current state, and what state you left. Use www.nacba.org attorney finder to locate competent local counsel.
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Lacking any net realizable equity were it to be sold, if you file a Chapter 7 bankruptcy the appointed Trustee would simply abandon the rental property and ownership would re-vest in you upon closing of the case, a period of 4-6 months on average. In a Chapter 13, where you remain the debtor in possession, the absence of any equity would mean that you would not need to factor in the property in the analysis of whether your Chapter 13 plan would meet the best-interest-of-creditors test. But, if the rental is actually causing a negative cash flow, in Chapter 13 trying to keep it would likely raise an objection, as the monies paid to cover the negative could otherwise be contributed to the Chapter 13 plan. But in either Chapter 7 or 13 you could discharge the mortgage loan and simply abandon the rental to the mortgage lender's right to foreclose the lien that would survive discharge. Otherwise, you could sell the property while in bankruptcy, but the Trustee's approval would need to be sought. But why would you want to incur any expenses of seeking additional orders or approvals, if you stand to gain nothing from a sale?
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