Bankruptcy is a legal process that allows individuals and businesses to discharge or reorganize their debts. Real estate can play a significant role in a bankruptcy case, as many individuals and businesses use their property as collateral for loans. In this report, we will discuss how bankruptcy can impact real estate and the options available to individuals and businesses in this situation.
When an individual files for bankruptcy, they have the option to include their real estate in the filing. This can include their primary residence, rental properties, or commercial properties. If the property is included in the bankruptcy, the individual may be able to discharge their mortgage or other liens on the property. However, it's important to note that this may also result in the loss of the property. In chapter 7 bankruptcy, the property may be sold to pay off the debts, while in chapter 13 bankruptcy, the individual may be able to keep the property by reorganizing the debt and making payments to the court for a period of 3-5 years.