Legal Question in Bankruptcy in Arkansas

Chapter 13 or 7

My mother is filing bankruptcy. She has terminal cancer and is unable to think clearly so I am helping her. Her credit card)debts are in her and her partner's names and they are filing jointly. She tried debt consolidation for three years - she paid $800 a month. Instead of reducing debt, her debt increased from $30,000 to $60,000. They own two pieces of property that are not only adjacent to each other but are combined in one mortgage (balance about $160,000 with an equity of about $70,000). One piece of property contains a rental apartment plus the apartment(s) they live in. The other piece of property is a small cottage that they also rent out(worth $60 - 70,000). They are unable to secure a loan to consolidate these credit card debts. Both my mother and her partner collect social security and a pension. Their JOB for the last 15 - 20 years has been either renting their property out as long term or as a bed and breakfast. My mother's priority is to keep the one house she lives in plus her car. If she can keep the second rental property that has been a small source of income as rental or B&B, she'd like to do that too. Should she file chapter 7 or 13 and what about the second rental property?


Asked on 7/20/03, 1:36 am

1 Answer from Attorneys
Herb Southern The Southern Law Firm

Re: Chapter 13 or 7

She is elegible for either 7 or 13 and there are plus and minuses to both. The problem is that she has too much equity in the property. That forces some different solutions to exempt it. Depending on how much personal property she has, she could use AR exemptions and be OK or if using the federal exemptions, she might have to buy back some of the equity.

We really need to sit down and discuss the real situation in detail. Feel free to call the office to set up an appointment.

Read more
Answered on 7/20/03, 10:49 am


Related Questions & Answers

More Bankruptcy Law questions and answers in Arkansas