We consulted with an individual who owned 5 real properties, including his homestead. Each property was valued at less than the respective 1st mortgage.
Collectively, the client’s debt exceeded $2.3 million, which included $915,000.00 of unsecured and undersecured claims. We filed an individual Chapter 11 bankruptcy case, and we were able to reduce the 1st mortgages down to the value(s) of each property that could operate on a cash-flow positive basis and remove all 2nd mortgages. For the property that could not operate on a cash-flow positive basis, the property was abandoned to the secured creditor(s) and the personal liability will be discharged.
With regard to the $915,000.00 of unsecured and undersecured claims, we were able to propose a repayment plan of 2.4%, over 5 years, in order to discharge the remaining debt.