Can you 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
If you're a homeowner and have a mortgage or car loan, or another kind of secured debt you might be wondering whether you are able to keep the property if you declare bankruptcy. However, the majority of time the answer is yes however, there are certain exceptions. It is important to speak with an attorney regarding your particular situation and the consequences of filing.
Secured debt is a property that is secured by a lien on the debt. This is the first aspect you should know about it. There is a possibility for a lender to repossess your collateral if you fail to make your payments, but they cannot pursue you if you are in a bankruptcy. You are able to keep your property provided you make regular payments. However the secured loan cannot be used to pay. If you would like to keep the property you own, you'll need to confirm the debt under Chapter 13.
Reaffirm your debts in bankruptcy if you are behind in mortgage or car payment. This will give you an opportunity to resolve your financial problems and return to your repayment plan. However, it will also permit the creditor to take possession of the property, which can result in you losing the value of your property.
Secured creditors may be based on a security arrangement like a deed or trust mortgage, judgment lien. If you fail to make your payments they may acquire possession of the property and collect interest and attorney's fees. Make sure that you make the payment again once it is repossessed.
You can save hundreds of dollars by retaining your collateral. You must retain the insurance you paid to secure the purchase and continue making your payments. Either negotiate the terms of a new contract, or sell your collateral. Negotiations are possible and can result in the creditor reducing or lengthening the time it takes to pay them, or negotiating additional conditions.
Selling your property is a different option to avoid foreclosure. Some states allow creditors to acquire the equity you have in your property, if you're in default on your mortgage. Selling your property may be an option to repay your debt if you are facing an emergency or you need the cash.
Another alternative is to reaffirm the debt during the Chapter 7 bankruptcy. Most debts will be wiped out by bankruptcy, but certain liens associated with some secured debts will not be. These liens will still be on your credit report and they will affect your credit score. After bankruptcy, it's important to review your credit report.
There are some debts that can be cleared however they remain on your credit record. There is also a statute of limitation that requires time for you to get removed from your credit report. Most people think they're familiar with the regulations and rules, only to find that they were wrong. Rules change and are often not explained very well. The best way to stay informed is research before declaring bankruptcy. Although nobody would like to go through the process but you must be prepared should you be forced to.
It is often difficult to understand the bankruptcy process. The automatic stay, which serves as an legal protection to prevent creditors from taking further actions against you, is a crucial fact to keep in mind. The creditor has the power to stop any collection activity 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's a lot of bankruptcy fraud that is circulating. Sometimes people are manipulated to believe they're being assisted by a bankruptcy attorney, but end up in a much more dire financial situation than they thought. Before signing any legal document, make sure that you have review the specifics.