Can You Remain in Your Home If You File for Bankruptcy?
Are you able to keep your property if you declare bankruptcy?
Secured debts can remain during bankruptcy
If you have a home mortgage or car loan, or another kind of secured debt you may wonder if you can keep the property in the event that you file for bankruptcy. While the majority of time you can however, there are certain 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 loans is that it's collateral that acts as secured by a lien. If you do not make payments, a creditor can repossess the collateral. However, they cannot pursue you for bankruptcy. As long as you are paying your debts, you are able to keep your property, but you will not be able to use it to pay the secured debt. If you file the case of a Chapter 13 bankruptcy, you have to renew your debt in order to keep your home.
Reaffirm your debts under bankruptcy if you are behind in mortgage or car payment. This gives you an opportunity to resolve your financial troubles and return to your payment plan. But, it could allow the creditor to seize the property, which can result in you losing the value of your property.
Secured creditors are based on a security arrangement, such as trust or deed or mortgage, or a judgment lien. If you do not make your payments they are able to acquire possession of your property and collect interest and attorney's fees. Once the debt is repossessed, you must reaffirm your payment or the debt will not be discharged.
You can save hundreds of dollars by keeping your collateral. It is important to keep the insurance that you paid to secure your purchase and keep making payments. You can negotiate a new contract with your creditor, or sell your collateral to another. Negotiations are feasible and could result in the creditor reducing or prolonging the period you make payments, or offering different conditions.
Another way to avoid foreclosure is to sell your property. If you're behind on your mortgage, some states permit creditors to seize the equity in your home. Selling your home could be a viable option to pay your debt if you are facing an emergency situation or require the cash.
Another option is to confirm the debt through the form of a Chapter 7 bankruptcy. Although most debts can be discharged in bankruptcy, liens on secured debts aren't. These liens will remain on your credit report, and will impact your credit score. After bankruptcy, it is important to review your credit report.
Certain debts are able to be paid off but remain on your credit report. There is also a statute of limitations that needs time to remove the debt from your credit report. Most people think they're familiar with the regulations and rules, only to discover that they were wrong. Rules change and are often not explained very well. Make sure you are informed before declaring bankruptcy. Although no one would like to go through the process, you should be prepared for the event that you have to.
It is often difficult to comprehend the bankruptcy process. A key point to be aware of is that the automatic stay is a legal safeguard to prevent the creditor from taking further action against you. The debtor is able to stop collecting, however, you can choose not to do so. If the creditor is not satisfied, they might be able to ask the court for the lifting of 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 that goes around. Some people are taken advantage of in a situation they believe is meant to be helpful but only later discover they're in greater financially trouble than they anticipated. Be sure to read the small print and be sure to understand the terms you are giving up and making a decision to sign before signing any legal document.