Can You Keep Your Property If You File for Bankruptcy?
Can you keep your property even if you declare bankruptcy?
In bankruptcy, secured debts can be kept
You may be wondering if you are allowed to keep your home, car loan, or other secured debt when bankruptcy is filed. While the majority of the time, yes but there are some exceptions to the rule. It is recommended to discuss your specific situation 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 very first thing you need to know about it. It is possible for a creditor to take possession of your collateral if you do not pay your bills however, they are not able to claim against you in the event of a bankruptcy. If you're making payments, you can keep the property, however you won't be in a position to use it to pay your secured loan. If you want to keep your home, you'll have to reaffirm the debt under Chapter 13.
If you're in debt on your mortgage or car payments, you will need to reinstate the debt in your bankruptcy. This will allow you to have the opportunity to address your financial issues and get back on track with your payment plan. But, it could allow the creditor to seize your property, which will result in the loss of value of the property.
Secured creditors are built on a security agreement that includes trust or deed mortgage, judgment lien. They can repossess your property if not pay the debt and can also take interest and attorney's fees from your property. It is imperative to make the payment again once the property is taken.
You could reduce your expenses by holding your collateral. It is important to keep the insurance you paid to secure the purchase and continue making your payments. You can either negotiate a new contract or transfer your collateral. Negotiations may be fruitful, with the result of an increase in your debt from a creditor or extending the period of time for payment, or offering additional terms.
Selling your property is another method to stay out of foreclosure. Some states allow creditors to acquire the equity you have in your home, in the event that you're behind in your mortgage. Selling your home could be a way to pay your debt if you are facing an emergency situation or require the money.
Another alternative is to reaffirm the debt during the form of a Chapter 7 bankruptcy. While most debts can be discharged in bankruptcy, liens attached to secured debts won't. These liens will remain on your credit report, and they can affect your credit score. Therefore, you should be sure to check your credit score after the bankruptcy filing.
There are some loans that can be repaid however they remain on your credit record. There is also a statute of limitation that needs time to remove the debt from your credit history. Many people believe they are well-versed in the rules and regulations, only to find that they were wrong. Rules are subject to change and at times, they're not easily understood. Do your research before you declare bankruptcy. Although no one would like to go through the process however, you should be ready in case you are forced to.
It is often difficult to comprehend the bankruptcy process. The automatic stay, which serves as an legal protection to prevent creditors from taking further actions against you, is an important fact to keep in mind. The debtor is entitled to stop any collection action, but if you refuse the creditor may 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 a myriad of instances of bankruptcy fraud. People are sometimes caught up in a scenario that they assume is supposed to be beneficial, only to discover that they are in more financially trouble than they anticipated. Make sure you read any small print and be sure to understand the implications of what you are giving up and making a decision to sign before signing any legal document.