Owning multiple properties can be a challenge, as it comes with a lot of responsibility. If your financial hardship has led you to consider bankruptcy, you may be concerned about how bankruptcy will affect your life. Some bankruptcy options can result in loss of assets, so does this mean that your multiple properties are at risk?
There is a lot to know about bankruptcy and how it can benefit your future. One of the first things you should know about is that there are multiple options for bankruptcy, and each choice has different outcomes.
Chapter 7
With this option of bankruptcy, the applicant sells off any nonessential assets to offset their debts. The courts will then discharge any remaining unsecured debts like credit card debt. Exemptions protect the possessions an applicant will not need to sell. These exemptions are for protecting essential assets like a car, clothing, furniture, or a primary residence. Non-primary assets like rental properties are typically not exempt, meaning the applicant will need to sell those assets to offset their debt.
Chapter 13
This option of bankruptcy allows an applicant to keep their investment properties. Instead of selling off nonessential assets before discharging their unsecured debts, Chapter 13 bankruptcy develops a repayment plan for the applicant in usually a three-year plan or five-year plan. At the end of the payment period, the courts discharge the remaining debt. This option is standard for those who have regular income to continue their monthly payments.
Weigh your options with a lawyer
Bankruptcy attorneys know how to determine the outcome of your bankruptcy decisions. They can help you choose the option that upholds your best interests. Whether you are prepared to give up your multiple properties or looking to protect them, there is a bankruptcy option that meets your needs.
