Legal Question in Bankruptcy in California

Chapter 7 trustees do not liquidate properties that have no equity. Liquidation must be warranted by yielding proceeds that can be paid to creditors. Proceeds must remain after proper liens are paid off, the debtor is paid any applicable exemption amount, costs of sale and trustee costs are incurred and trustee commissions are paid.

Of course, all assumptions regarding equity are based upon accurate appraisal of property value.

Rental income and mortgage expenses are important factors in the analysis of your case including the determination of disposable income.

Standard disclaimer: the above statements are opinion with a general, rather than specific application provided for informational purposes only; they do not constitute legal advice, do not create an attorney-client relationship, and should not be relied upon as they do not anticipate all conflicts, contingencies and factors of which only an attorney of record would know. Congress keeps busy legislating and these statements may not reflect the current state of the law. All bankruptcy petitioners should seek legal counsel.