How will a Chapter 13 repayment plan account for investment property?

The answer is simple—like any other property and any other income stream. You will list the value of the investment property, the same as you would list the value of your residence. You will also list any income you derive from the property, as well as any costs associated with it and all debts on in. This information gets “baked” into the overall plan, together with information about your other income, costs, property, and debts.

That’s why Chapter 13 is generally favored by those with investment property—it doesn’t force you to liquidate investments to pay creditors, but instead lets you operate under a repayment plan that takes into account all your income and costs.

Note that Chapter 13 is not available if you have secured debts exceeding a certain amount, currently a little more than $1 million. If you have mortgages on the investment property and the aggregate value of the mortgages exceeds that threshold, you may not be eligible for Chapter 13.

Talk to a Bankruptcy Lawyer to find out about using bankruptcy to get rid of debt, and how you can lower your investment property principle in a chapter 13 plan.