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Investment Property in Vegas - Foreclosure Implications

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  • 12-29-2010, 02:17 PM
    olafmagee
    Investment Property in Vegas - Foreclosure Implications
    My question involves bankruptcy in the state of: I live in CA. I own my primary residence there with equity of about $50K. I have an investment property in NV. I am upside down about $80K. I can't find a renter. I am considering just letting the bank foreclose on it. I have researched Chap 7. My income (family of four) is under the median income so it appears that I qualify. As well, it appears I can exempt my primary residence given the limited amount of equity. I don't have much more in terms of assets. If I file a chapter 7, can I discharge: 1) the deficiency judgment? 2) any capital gain from the sale (my basis is low bc I have depreciated the property for 8 years so this is a possibility)? 3) the taxes owed for recapture of the depreciation for 8 years? If a chapter 7 is the best option? When should I file it?? Can I wait until the vultures (bank, IRS) start circling down the road? Or should I do it before the foreclosure. I need some advice regarding the timing. I'd just as soon wait to see if they pursue me before filing; however, I don't want to miss a deadline.
  • 12-31-2010, 10:19 AM
    Mr. Knowitall
    Re: Investment Property in Vegas - Foreclosure Implications
    You can discharge a deficiency in Chapter 7. The discharge of tax obligations is a fact-dependent analysis, so you should discuss the details of your tax issues with your bankruptcy lawyer.
  • 01-06-2011, 02:34 PM
    olafmagee
    Re: Investment Property in Vegas - Foreclosure Implications
    Thanks. Does the timing of filing the Chapt 7 petition matter?? Can I just wait to see if the bank pursues me and then file chapter 7?? Or is there a need to file prior to the foreclosure??? Any details you can provide regarding timing would be appreciated.
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