Expert: Mark J. Markus- California Bankruptcy Attorney - 1/26/2010

Question
We live in California, and own 2 homes. The first is worth about 510,000 and we owe 415,000. It is rented for 2000. a month the  Interest Only payment is 2100 per and will resent in 2 years, not does it cover any of the taxes and insurance. The second home we live in and it is worth about $360,000 and we owe $411,000 on the first and 70000. on the second. We have substantial non-secured debt and we have used up most of our assets over the past year.

Would be required to sell either of the homes? Since the one we are renting has the only equity. (about 85 to 90k) and our primary residence is upside down. What if we moved back into the home with the equity would that change the situation?  

Answer
In a Chapter 7 case you would likely have to give up the property with equity.  If you moved back into that property and recorded a homestead declaration (and established it as your homestead) then you would probably be able to exempt (protect) the equity in it, assuming you are married.

http://www.bklaw.com/