Individual Real Estate Investor Chapter 11 Cases
December 8, 2010
Individual Real Estate Investor Chapter 11 cases have been on the rise in FLorida because of the decline in the real estate market. Real estate investors really have a lot to gain from a Chapter 11. Below are just a few things that Chapter 11 may be able to do for the struggling investor.
1. It allows real estate investors to lower loan balances to the current market value of the real property and to restructure that loan over a new term with a low, fixed interest rate.
2. It allows real estate investors to completely remove second or third mortgages from properties where the value is less than the first mortgage balance. The second and third mortgages are then treated as completely unsecured and are discharged at the completion of the case just like a credit card debt.
3. It allows individuals to restructure their unsecured debt, including unsecured second and third mortgages. Individuals have to pay back anywhere from 0% to 100% to their unsecured creditors depending on their particular circumstances. Even if 100% is required, it is paid back over at least five years with little to no interest and absolutely no penalties or late fees.
4. It immediately stops any legal proceeding against the individual, including foreclosure proceedings.
5. It provides a period of time where no payments are made on unsecured debt and smaller payments are made on secured debt which allows individuals to save up a cash reserve to operate.
There are many other reasons for real estate investors to consider Chapter 11 bankruptcy when faced with tough financial times. Please feel free to setup a free consultation to consider your particular situation and options.