Some people might have maybe a second home or an investment property. What happens in that case?

For investment properties, you have an option. You can always file a bankruptcy and give it up if you don’t want it. But if you want to keep it and let’s say it’s providing a decent amount of rent to cover the principal interest, the homeowners fees and all those things, you can actually reduce the principal on your investment home in a chapter 13 bankruptcy as long as you’re willing to pay the balance in five years with about 5% to 6% interest. So let’s say for example you owe $200,000 on a condo but the condo’s only worth $60,000. As long as you can pay $60,000 over a 5 year period with about 5% or 6% interest, you can actually keep your condo and keep on renting it out, collect rent, and own it free and clear in 5 years. That is the magic of Chapter 13.