Legal Question in Bankruptcy in California

When considering filing Chapter 13 bankruptcy, first you need to be aware that there are limitations on the debt - secured and unsecured - you can have. In California, someone who owns more than one property may in fact have too much secured debt to qualify for Chapter 13 relief.

Second, yes, you may be able to walk away from the Condominium in a Chapter 13 bankruptcy, and retain your home. There are a lot of other issues that will affect whether or not this can or will work, but understand that in principal, you can elect to keep one property, while walking away from another. You also need to look at timing. Post-filing HOA dues are not discharged in a bankruptcy. You could be liable for post-filing HOA dues on the condo while you wait for the bank to foreclose it. By filing a chapter 13 you will almost certainly see the lender on the Condo take even a bit longer to foreclose, as they may believe that you intend to cure the mortgage in the Chapter 13. You can help them along in the bankruptcy (towards foreclosure) by serving them with a copy of your Statement of Intent as soon as you file, indicating that you intend to walk away from the Condo. As for what a Chapter 13 will do for you (in terms of how much of your credit cards will be discharged) you need to meet with a bankruptcy attorney, and go over a proposed chapter 13 plan.

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A Chapter 7 may accomplish what you are trying to do ... and for a lot less money.

Are you sure you want to do a Chapter 13?

Keep in mind that you will be personally liable for any HOA fees that accrue after filing your BK as long as you are the owner of record.