Q: My client is 88, her home is under water and she cannot afford to repair the failing electric and plumbing systems.
On paper, she is not low-income ($42,000/year) but owes $7K for electric and many other debts. If she foreclosures is she still responsible for the mortgage? (She cannot pay that and rent also.) Would Chapter 11 be a better option for her? Can she rent an apartment after Chapter 11 or will landlords shy away from her application?
A: A Chapter 7 bankruptcy sounds like it may be in her best interest at this time however I can not say this absolutely without a full interview. You can call me or another experienced bankruptcy attorney and they should be able to give you a good solid answer and plan to move forward. A chapter 7 discharge would absolve her of her unsecured debts and any deficiency balance after the surrender or foreclosure on the house and allow her to get a fresh start by just paying rent.
A: She needs to consult a competent bankruptcy attorney immediately. She may qualify for chapter 7 or she may need chapter 13. She does not qualify for chapter 11 as that is business reorganization only.
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