Legal Question in Bankruptcy in Wisconsin

Renting Out Properties During a Chapter 7 Bankruptcy

Yes, although I cannot give you legal advice, it is often possible to retain rental properties in a chapter 7, depending upon your income and assets. You need to discuss this plan in detail with your own attorney--he may discuss it with the trustee and amend your bankruptcy schedules as needed in order to prevent problems with the trustee. Persons whose net income exceeds the state median for their family size may face an objection from the trustee that there chapter 7 case is �abusive� under the code; encouraging them to consider chapter 13 instead where they pay back a small amount of their unsecured debt. Although there are defenses to such objections from the trustee, defending these objections can be expensive. In light of that, it is sometimes more practical to avoid the fight and convert voluntarily to chapter 13 if your income is too high. Exceptions to the median income standards in chapter 7 cases can sometimes be made for persons who have large secured debt payments. Of course, keeping any secured property during any sort of bankruptcy usually depends upon keeping you bank happy. The bank can lift the stay and foreclose (or continue a pre-bankruptcy foreclosure) if post petition payments are past due. In chapter 7 cases, the stay (freeze on litigation outside bankruptcy court) expires once your case is closed, which is often 60 days after your court date. After closure of your case, ownership of the property generally reverts to the pre-bankruptcy status (unless the trustee has sold a nonexempt or unsecured property).That can also include foreclosure, if you have violated your loan obligations.