Under Chapter 7 bankruptcy, all of a debtor's assets are liquidated to repay creditors, including any investment properties. Chapter 13 bankruptcy allows a debtor to keep their investment properties by reorganizing and restructuring debts through a repayment plan over several years, where rental income from investment properties may increase monthly payments. The document discusses how real estate investments are treated under Chapters 7 and 13 bankruptcy proceedings.

1. Under Chapter 7 bankruptcy, the bankruptcy trustee mostly
cancels your debts if not all. This means all of your assets and
property will be liquidated to repay the creditors. This is why it is
also referred to as “liquidation” bankruptcy and not even a
homestead exemption can protect any of the investment real
estates. You are subject to loose your investment or rental
property under Chapter 7 bankruptcy proceedings.
THE STRAIGHT FORWARD BANKRUPTCY
With Chapter 13 bankruptcy, you are able to keep your property
which holds true for personal as well as investment property. It
lets you reorganize and re-structure your debt to eventually pay it
all off. You need to make some arrangements to repay a major
portion of your debt over a period agreed upon during the
proceeding. The only condition is that the income from your real
estate investment may increase the monthly payment which you
are required to pay to the bankruptcy trustee.
THE REORGANIZATION BANKRUPTCY
HOW IS REAL ESTATE
INVESTMENT TREATED
Real estate investment is basically any property that you don't
personally live or use. But bad times can knock at anyone's door at
anytime. Staying informed beforehand is always good. Let's see how
your investment property will be treated depending on the type of
bankruptcy you are filing.
CHAPTER 7
VISIT WWW.NADERLAWFIRM.COM TO KNOW MORE DETAILS
NADER & BERNEMAN EXPLAINS
WHEN YOU FILE FOR BANKRUPTCY
CHAPTER 13