Can you keep your property if you declare bankruptcy?
Are You able to keep your property even if you declare bankruptcy?
In bankruptcy, secured debts can be protected
You might be wondering if you are allowed to keep your home, car loan, or another secured debt when bankruptcy is filed. While the majority of the time, yes but there are some exceptions to the rule. It is crucial to speak with an attorney regarding your particular situation and the consequences of filing.
The most important thing to remember regarding secured debt is that it's collateral that acts as a lien on the debt. If you do not make payments, a creditor can repossess the collateral. However, they cannot sue you for bankruptcy. You can keep your property in the event that you pay regular payments. However, your secured loan can't be used to repay. If you file the case of a Chapter 13 bankruptcy, you will need to reaffirm your debt in order to keep your home.
If you're behind in your car or mortgage payments, you'll need to reinstate the debt in your bankruptcy. This gives you the opportunity to address your financial problems and return to your payment plan. It will allow the creditor access to your home and could result in you losing the value of your property.
Secured creditors are based on a security agreement like a trust deed, a mortgage or a judgment lien. If you fail to make your payments, they can be able to take possession of the property and demand attorney's fees and interest. When the debt is repossessing it is necessary to confirm your payment or the debt will not be discharged.
Saving your collateral could save thousands of dollars. It is important to keep the insurance that you paid to secure the purchase and continue to make your payments. You can either negotiate the terms of a new contract, or transfer your collateral. Negotiations can be productive, leading to a creditor reducing your debt and extending your period of time to pay or offering different terms.
Another method to stay out of foreclosure is to dispose of your property. Some states allow creditors to take the equity you have in your home, in the event that you're behind in your mortgage. If you're facing need of money, selling your property can help you repay your loan.
Reaffirming the debt in Chapter 7 bankruptcy is another alternative. While most debts can be discharged in bankruptcy, liens on secured debts aren't. These liens will still be on your credit report and will impact your credit score. Therefore, you should check your credit report after filing for bankruptcy.
Some debts can be paid off but they will be on your credit reports. There is also a statute of limitation that needs time to remove the debt from your credit report. Many times, people believe they understand the rules and regulations and later discover that what they thought to be true was anything however. Rules change and sometimes are not explained very well. The best option is research prior to filing for bankruptcy. Although no one would like to go through the process but you must be prepared in case you are forced to.
The bankruptcy process is difficult to understand. The automatic stay, which acts as an legal protection to prevent creditors from taking any further action against you, is a crucial aspect to be aware of. Your debtor has the right to end any collection actions however, if you do not comply the creditor could have the right to petition for a stay to be lifted by the court. 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 is a lot of bankruptcy fraud that is circulating. People are sometimes taken advantage of in a situation they assume is supposed to be helpful but only discover that they are in more in financial difficulty than they expected. Always read through any fine print and really understand what it is you're signing prior to signing any legal documents.