Can You Keep Your Property In the event of declaring bankruptcy?
Can You Remain in Your Home In the event of declaring bankruptcy?
In bankruptcy, secured debts may be retained
You may be wondering whether you can keep your home, car loan, or another secured debt if bankruptcy is filed. While the majority of time it is true however, there are some exceptions. It is recommended to discuss your particular circumstance with an attorney and be aware of the implications of filing.
Secured debt is property which is an obligation to the debt. This is the very 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 claim against you in the event of filed for bankruptcy. So long as you're making payments, you can keep your property, but you are not allowed to use it to repay the secured loan. If you wish to retain the property you own, you'll have to reaffirm the debt 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 solve your financial issues and get on track in your repayments. But, it could allow the creditor to seize the property, which can result in the loss of value of your property.
Secured creditors are created by an agreement to secure the property like a trust deed, a mortgage or a judgment lien. If you fail to pay your debts they are able to acquire possession of your property, and they can also collect interest and attorney's fees. Once the debt is repossessed it is necessary to confirm your repayment or else the debt won't be discharged.
You can reduce your expenses by holding your collateral. You must retain the insurance you purchased to protect your purchase, and keep making payments. Either negotiate the terms of a new contract, or transfer your collateral. Negotiations can be fruitful, with the result of a creditor reducing your debt and extending your period of time to pay, or offering other conditions.
Selling your property is another way to avoid foreclosure. Certain states permit creditors to acquire the equity that you own in your property, if you're behind on your mortgage. Selling your property may be a viable option to pay your debt in the event of urgent needs or need the cash.
Another alternative is to confirm the debt in the Chapter 7 bankruptcy. While most debts can be discharged in bankruptcy, liens attached to secured debts will not. These liens will still be visible on your credit report and will impact your credit score. Following bankruptcy, it's essential to examine your credit reports.
There are certain loans that can be repaid but still remain on your credit record. You will also need to meet a deadline in order to get your debts removed from credit reports. People often think they are aware of the regulations and rules, only to later discover that what they thought to be true was nothing but. Rules change and at times, they're not well explained. The best way to stay informed is to research prior to declaring bankruptcy. Although no one wants to go through this, you should be prepared should you be forced to.
The bankruptcy process is confusing. 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. Your debtor has the right to stop any collection action, but if you refuse the creditor could 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 fraud in bankruptcy. Sometimes people are manipulated into thinking they're getting help by a bankruptcy lawyer but end up in deeper financial trouble than they anticipated. Before signing any legal documents, be sure that you have read the fine print.