Chapter 11 and Rental Property

Chapter 11 Bankruptcy is a great way to knock out a lot of the negative equity in rental properties.  An example of a resent case we filed had 10 rental property’s located in Jacksonville Florida, Orlando Florida and Miami Florida. Since the person lived in Jacksonville we filed them in our Jacksonville office. The chapter 11 allowed us to cram down each house based on the present values and we averaged about 4.75%fixed rate over a 25 year period.  This allowed the person to cover the principle, interest, property taxes and property insurance with the money they were receiving in rent.  Some property’s had a surplus that helped with less performing properties and with repairs.