Can You Keep Your Property In the event of declaring bankruptcy?
Can you retain your property in the event that you file for bankruptcy?
In bankruptcy, secured debts may be kept
If you are a homeowner with a mortgage, car loan or other kind of secured debt you may wonder whether you could keep the property in the event that you declare bankruptcy. Although the majority of the cases, it is true however, there are certain exceptions. You should discuss your specific circumstance with an attorney and be aware of the implications of filing.
Secured debt is a property that is a lien on the debt. This is the first aspect you should know about it. If you fail to make your payments, a creditor can take possession of the collateral. However, they can't sue you for bankruptcy. If you're making payments, you can keep your property, but you won't be able to use it to pay your secured loan. If you file a Chapter 13 bankruptcy, you must reaffirm your debt if you want to keep your home.
If you are behind on your mortgage or car payments, you'll need to reinstate the debt in your bankruptcy. This will enable you to deal with your financial difficulties and get on track with your payments. However, it can permit the creditor to take possession of the property, which can cause you to lose the value of your property.
Secured creditors are based on a security arrangement like a deed or trust mortgage, judgment lien. If you fail to pay your debts they may take possession of the property and demand interest and attorney's fees. Make sure that you pay back the debt after the property is taken.
You can save hundreds of dollars by retaining your collateral. However, you have to keep the insurance that you purchased to protect your purchase, and continue to pay your bills. You can either negotiate the terms of a new contract, or transfer your collateral. Negotiations can be fruitful, with the result of a creditor reducing your debt or extending the period of time to pay, or offering different terms.
Selling your property is a different way to avoid foreclosure. If you're in default on your mortgage payments, certain states permit creditors to take equity in your property. If you are in an emergency and need the cash, selling your property could help you pay off your debt.
Another alternative is to confirm the debt during a Chapter 7 bankruptcy. The majority of debts will be cleared out by bankruptcy, however certain the liens attached to certain secured debts won't be. These liens will still be on your credit report and they will affect your credit score. Therefore, you should examine your credit report following filing for bankruptcy.
There are certain debts that can be cleared however they remain on your credit report. You must also meet a deadline in order to have your debts deleted from credit reports. Many people believe they are familiar with the regulations and rules only to find that they were wrong. Rules change and they may not be easily understood. Do your research before you declare bankruptcy. While nobody would like to go through the process however, you should be ready for the event that you have to.
It can be difficult to comprehend the bankruptcy process. One important piece of information to be aware of is that the automatic stay is a legal measure to stop the creditor from taking any further actions against you. Your debtor has the right to stop any collection action, but if you refuse the creditor may be entitled to request for a stay to be lifted by the court. Look at websites such as https://www.ljacobsonlaw.com/pa/harrisburg-bankruptcy-attorney/ for more information on bankruptcy and seek professional advice to answer your questions.
There is a lot of bankruptcy fraud that goes around. Sometimes people get manipulated into a situation that they believe is meant to help them, but then come to find out they are in more in financial difficulty than they expected. Before signing any legal documents, be sure that you have go over the small print.