Can I file chapter 13 bankruptcy with no assets?
I have a home in which I have an offer to sell as a short sale. I am still way over my head with CC debt. Can I file for the Bankruptcy which eleminates all debt if I don’t have any assets (a house)?
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You’re opening a major can of worms with a short sale on your home. In a short sale, your lender will allow you to sell your home for less than you owe. What then happens is the lender sends you a 1099 and "gives" you the difference between what your home sold for and what you owed. This is income – TAXABLE INCOME.
In a bankruptcy, your attorney would simply surrender or abandon your home in your Statement of Intent. Since you are not trying to save your home and your other debt is credit card debt, you would be able to discharge your credit card debt and the deficiency balance (the difference between what your home sells for and what you owe) provided that you do not get forced into a Chapter 13 (Repayment) by the Means Test.
Please speak with a qualified attorney before you agree to a short sale of your home. I would certainly hate for your situation to be made worse by creating "income" that you cannot afford to pay the taxes on. These taxes would not be dischargeable through bankruptcy.
Chapter 13 does not relive you of all debts. The court works out a repayment schedule based on your income.
Of course you can file with no assets. Your home is usually protected. the reason for bankruptcy is that your liabilities exceed your assets.
But of course you do have some assets. You are not walking around town naked. And you have stuff in your house.
You talk to a bankruptcy attorney before considering the short sale and determine which is best for you.
They are better at this than those scammers who are talking you into a short sale.