I have a rental, upside down about $80K in value. **** Can I keep it as a rental if I file chapter 7?

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I have a rental, upside down about $80K in value. **** Can I keep it as a rental if I file chapter 7?

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Asked on April 12, 2009 under Bankruptcy Law, Oregon

Answers:

N. K., Member, Iowa and Illinois Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Chapter 7 involves the trustee selling the debtor's nonexempt assets and using the proceeds from the sale to pay the creditors.

What property is exempt is a matter of both state and/or federal law. This is because states are permitted under the Federal code to adapt thier own exemption laws in place of federal exemptions. In other states, the debtor has the choice of choosing between a federal exemption or a state's exemption.

You should consult a lawyer in your state to determine if your rental is exempt under state law. Or, if you have a choice between state and federal, which is more beneficial for you.


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