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Expert: - 5/9/2009


Question
Thank you for taking my question.

I am considering filing chapter 7 bankruptcy in Arizona. I have rental properties which I am letting go to foreclosure.   However, I intend to include them in the bankruptcy. My question is whether I should allow them to foreclose BEFORE I file bankruptcy so that any potential deficiency judgement would be wiped out in the BK.    Or, doesn't the timing matter... should I file BK first, then allow the properties to foreclose.
Thank you

Answer
This is actually a very good question.  Whether the foreclosure sale takes place before, during, or after your bankruptcy can have significant consequences, primarily in terms of tax issues (capital gains, reduction of tax attributes such as loss carryforwards, etc.).  There is no one right answer and your situation should be analyzed by a competent tax attorney so that you can optimize the results for your situation.

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Mark J. Markus- California Bankruptcy Attorney

Expertise

Mark J. Markus is a Los Angeles bankruptcy attorney who has practiced exclusively bankruptcy law in California since 1991 and is rated A+ by the Better Business Bureau and is AV-rated by Martindale-Hubbell. He represents debtors, creditors, and Trustees in Chapter 7, Chapter 11, and Chapter 13 of the bankruptcy code throughout California.

Experience

Visit our California bankruptcy webpage at http://www.bklaw.com for more information on bankruptcy in general and Mark J. Markus in particular. Many questions are answered on the web page (hint, hint).
The Markus webpage also contains more information on

  • Which Chapter to File,
  • business bankruptcy,
  • chapter 7 bankruptcy,
  • chapter 11 bankruptcy,
  • chapter 13 bankruptcy,
  • Do You Need a Lawyer to File Bankruptcy?
  • Frequently Asked Bankruptcy Questions

    Also visit our Los Angeles bankruptcy blog for interesting articles and much more.



    Organizations
    Central District Consumer Bankruptcy Attorneys Association (CDCBAA) Los Angeles County Bar Association (LACBA) Commercial Law & Bankruptcy Section of the Los Angeles County Bar Association Financial Lawyers Conference (FLC) National Association of Consumer Bankruptcy Attorneys (NACBA) Los Angeles Bankruptcy Forum (LABF) American Bankruptcy Institute (ABI) San Fernando Valley Bar Association (SFVBA)

    Publications
    Central District Consumer Bankruptcy Attorneys Association Newsletter September 2007 (Vol. 1, Issue 2)

    Education/Credentials
    J.D., University of Arizona 1990. B.A. Economics, California State University, Northridge 1986. For more details please click here

    Awards and Honors
    AV Rated by Martindale-Hubbell (http://www.martindale.com) A+ Rated by Better Business Bureau

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