Can You Keep Your Property In the event of declaring bankruptcy?
Can You Keep Your Property If You Declare Bankruptcy?
Secured debts could remain in bankruptcy
You might be wondering if you are allowed to keep your house, car loan, or other secured debt in the event of bankruptcy being filed. Although the general answer is yes but there are some exceptions to this rule. You will want to discuss your particular situation with an attorney and know the consequences of filing.
The most important thing to remember regarding secured loans is that it's property that is an obligation on the debt. It is possible for a creditor to take possession of your collateral if you do not pay your bills however they cannot sue you if you have declared bankruptcy. Your property can be kept in the event that you pay regular payments. However the secured loan cannot be used to pay. In a Chapter 13 bankruptcy, you have to renew your debt if you wish to keep your home.
Reaffirm your debts through bankruptcy if you're in debt on car or mortgage payments. This will allow you to resolve your financial problems and get on track in your repayments. It will allow the creditor access to your home and could lead to the loss of the value of your property.
Secured creditors are based on an agreement to secure the property, such as the deed of trust, a mortgage or a judgment lien. If you fail to pay your debts they are able to acquire possession of the property and collect fees and interest. It is imperative to make the payment again once it is repossessed.
Keeping your collateral can save you hundreds of dollars. However, you have to keep the insurance you would have purchased to protect your purchase, and continue to make your payments. You can either negotiate the terms of a new contract with your creditor, or transfer your collateral to someone else. Negotiations are feasible and could result in the creditor reducing or prolonging the period you pay them, or negotiating additional terms.
Another way to avoid foreclosure is to dispose of your property. If you're behind on your mortgage payments, certain states permit creditors to take equity in your property. If you're in an emergency and need the cash, selling your property could help you pay off your credit card.
Another alternative is to reaffirm the debt during the Chapter 7 bankruptcy. While the majority of debts can be discharged under bankruptcy, the liens attached to secured debts will not. These liens will remain on your credit report, and they can affect your credit score. Following bankruptcy, it is important to check your credit reports.
There are certain debts that can be cleared but remain on your credit record. It is also necessary to adhere to a specific timeframe in order to have your debts removed from credit reports. People often assume they are aware of the regulations and rules only to find that they're wrong. Rules change, and often are not explained very well. Be sure to research the rules before you declare bankruptcy. Nobody would like to declare bankruptcy, but if you find yourself in that circumstance, you must be aware of everything you need to be aware of prior to proceeding.
The bankruptcy process is complicated. A key point to remember is that an automatic stay is legal safeguard to prevent the creditor from taking any further action against you. The debtor can stop collecting, however, you are able to refuse to stop them. If the creditor does not agree with the stay, they could be able to ask the court to lift the suspension 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 are a myriad of instances of fraud in bankruptcy. Some people are caught up in a scenario that they believe is meant to help them, but then come to find out they're in much more in financial difficulty than they expected. Before you sign any legal documents, make sure that you have review the fine print.