Are You able to retain your property in the event that you file for bankruptcy?
Are you able to retain your property in the event that you file for bankruptcy?
In bankruptcy, secured loans can be protected
You might be wondering if you are allowed to keep your car, home loan, or any other secured debt if bankruptcy is filed. Although the majority of the times, you can however, there are some exceptions. It is important to speak with an attorney regarding your particular situation and the consequences of filing.
The first thing you need to know about secured debt is that it's collateral that acts as an obligation on the debt. If you fail to make your payment, a creditor may repossess your collateral. However, they can't claim bankruptcy against you. As long as you are paying the debt, you will be able to keep your property, but you will not be able to use it to repay the secured loan. If you file a Chapter 13 bankruptcy, you will need to reaffirm your debt if you want to keep your property.
If you are behind on your mortgage or car payment, you'll have to reaffirm the debt in your bankruptcy. This will let you deal with your financial difficulties and get on track with your obligations. But, it could allow the creditor to repossess your home, which could cause you to lose the value of the property.
Secured creditors can be based on a security arrangement, such as a deed or trust or mortgage, or a judgment lien. If you do not pay them they are able to be able to take possession of your property and demand interest and attorney's fees. You must make sure you pay the debt again after it is repossessed.
Saving your collateral could save thousands of dollars. It is important to keep the insurance that you paid to secure your purchase and continue to make your payments. You can either negotiate the terms of a new contract with your creditor or transfer your collateral to a different person. Negotiations are feasible and could result in your creditor reducing or prolonging the period you pay it, or offering other terms.
Another option to stay out of foreclosure is to dispose of your property. Some states allow creditors to acquire the equity that you own in your property, if you are behind in your mortgage. Selling your property may be an option to repay your debt in the event of an emergency situation or require the cash.
Reaffirming the debt in Chapter 7 bankruptcy is another option. Although most debts can be discharged in bankruptcy, the liens attached to secured debts won't. These liens will be on your credit report and affect your credit score. After filing bankruptcy, it's essential to review your credit report.
There are some debts that can be cleared however they remain on your credit report. There is an additional statute of limitation that needs time to remove the debt from your credit history. Most people think they're aware of the regulations and rules but then realize they're not. Rules are subject to change and they may not be easily understood. Be sure to research the rules prior to declaring bankruptcy. Nobody wants to do it but if you find yourself in that circumstance, you must be sure you know everything you must know prior to deciding.
The bankruptcy process can be confusing. The automatic stay, which serves as a legal safeguard to stop creditors from taking any further action against you, is an important aspect to be aware of. Your debtor has the right to end any collection actions and if you don't the creditor could have the right to petition the court to lift the stay. 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's a lot bankruptcy fraud going around. Sometimes people are manipulated into believing they're being helped by a bankruptcy attorney, but end up in a much more dire financial situation than they anticipated. Be sure to read the fine print and really understand what it is you are giving up and signing prior to signing any legal document.