Can You Remain in Your Home If You File for Bankruptcy?
Can you keep your property even if you declare bankruptcy?
Secured debts may stay during bankruptcy
You may be wondering whether you can keep your house, car loan, or another secured debt when bankruptcy is filed. While the majority of the time, yes however, there are a few exceptions to this rule. It is essential to talk with an attorney regarding your specific situation and the implications of filing.
The first thing to understand about secured loans is that it is collateral that acts as a lien on the debt. If you do not make payments, the creditor is able to take possession of the collateral. But, they are unable to pursue you for bankruptcy. As long as you are making payments, you can keep your property, but you will not be able to use it to repay your secured loan. If you wish to retain your property, you will have to reaffirm the debt in Chapter 13.
Reaffirm your debts under bankruptcy if you're behind on mortgage or car payments. This will enable you to solve your financial issues and make progress with your payments. However, it will also allow the creditor to seize your property, which will result in you losing the value of your property.
Secured creditors are created by a security agreement like the deed of trust or mortgage, or judgment lien. If you do not make your payments they are able to take possession of the property and demand fees and interest. Once the debt is repossessed, you must reaffirm your loan or the debt won't be discharged.
You can save hundreds of dollars by keeping your collateral. You should keep the insurance that you paid to secure your purchase and continue to make your payments. Negotiate the terms of a new contract, or transfer your collateral. Negotiations are feasible and could lead to your creditor cutting or lengthening the time it takes to pay it, or offering additional terms.
Another method to stay out of foreclosure is to dispose of your property. Some states allow creditors to acquire the equity that you own in your home, in the event that you're behind in your mortgage. If you're in an emergency situation and require cash, selling your property will help pay back your loan.
Reaffirming the debt in Chapter 7 bankruptcy is another alternative. Although most debts can be discharged under bankruptcy, the liens attached to secured debts aren't. These liens will still be on your credit report, and they can affect your credit score. Therefore, you must check your credit report after filing for bankruptcy.
There are certain debts that are able to be paid off but remain on your credit record. There is an additional statute of limitation which requires a certain amount of time to remove the debt from your credit history. Many times, people believe they understand the regulations and rules, only to they discover that what they thought to be true was nothing but. Rules change, and often are not explained very well. The best thing to do is to research prior to filing for bankruptcy. It is not something that anyone would like to declare bankruptcy, however, if you're in that circumstance, you must know all you need to know prior to deciding.
The bankruptcy process can be complicated. One important piece of information to keep in mind is that an automatic stay is legal precaution to stop the creditor from taking any other actions against you. The debtor is entitled to stop any collection activity and if you don't the creditor may 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's a lot bankruptcy fraud that is circulating. Some people are tricked to believe they're being assisted by a bankruptcy attorney, however, they are in deeper financial trouble than they realized. Before signing any legal documents, make sure you've review the small print.