Are you able to keep your property even if you declare bankruptcy?
Can You Keep Your Property In the event of declaring bankruptcy?
In bankruptcy, secured debts can be retained
You may be wondering whether you can keep your home, car loan, or any other secured debt in the event of bankruptcy being filed. However, the majority of time you can, there are certain exceptions. It is recommended to discuss your specific situation with an attorney and understand the consequences of filing.
The first thing you need to know about secured debt is that it is property that is a lien on the debt. There is a possibility for a lender to take possession of your collateral if you are unable to pay your debts however, they are not able to pursue you if you are in a bankruptcy. You are able to keep your property provided you make regular payments. But the secured loan cannot be used to pay. If you would like to keep your home, you'll be required to reaffirm the loan in Chapter 13.
If you're in debt on your mortgage or car payments, you'll need to reinstate the debt in your bankruptcy. This will allow you to deal with your financial difficulties and get back on track with your obligations. This will give the creditor to access your property and will result in you losing the property's value.
Secured creditors are created by a security agreement like a deed of trust or mortgage, or judgment lien. If you do not pay your debts, they can be able to take possession of the property and demand attorney's fees and interest. You must make sure you make the payment again once it's repossessed.
You could save hundreds of dollars by holding your collateral. It is important to keep the insurance that you paid to secure the purchase and continue making your payments. Either negotiate an agreement with a new vendor or sell your collateral. Negotiations may be productive, leading to the creditor being able to reduce your debt, giving you an extension of time to pay or negotiating additional conditions.
Selling your property is another option to avoid foreclosure. Certain states permit creditors to take the equity you have in your property, if you're in default on your mortgage. If you are in an emergency and need the cash, selling your property will help pay back your loan.
Reaffirming debts in Chapter 7 bankruptcy is another option. The majority of debts will be cleared out in a bankruptcy, however certain lien liens that are associated with certain secured debts won't be. These liens will remain visible on your credit report and will impact your credit score. Therefore, you must check your credit report after declaring bankruptcy.
Some debts can be paid off, but they will be on your credit reports. There is also a statute of limitations that needs time to be removed from your credit history. Many times, people believe they understand the rules and regulations, only to then find out that what they assumed to be true was anything but. Rules change and sometimes are not well explained. The best option is to research prior to declaring bankruptcy. Although no one wants to go through it however, you should be ready in case you are forced to.
It is often difficult to comprehend the bankruptcy procedure. The automatic stay, which acts as an legal protection to prevent creditors from taking any further action against you, is an important fact to keep in mind. The debtor is entitled to end any collection actions and if you don't, the creditor might be able to ask 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 are many cases of fraud in bankruptcy. Sometimes people get caught up in a scenario that they assume is supposed to be helpful but only come to find out they're in greater financial trouble than they thought. Make sure you read any legal document and fully comprehend what it is you're signing prior to signing any legal documents.