When you file bankruptcy, you may worry about what will happen with your secured assets like your home or your cars. Bankruptcy provides some flexibility in dealing with your secured debt.
Liens
Sometimes bankruptcy can remove a creditor’s lien, making the debt unsecured and eligible to be eliminated with the rest of your unsecured debt. You can ask the bankruptcy court to remove the claim and eliminate the creditor’s ability to seize the collateral. Since most household goods are exempt, you can avoid liens when you did not use any money from that creditor to purchase the products.
Redeeming Property
You can keep your collateral by a process called “redeeming.” You can pay the creditor the current value of the property and not the total due on the loan. Often you can save thousands; for instance, if your car’s value is two thousand dollars and you owe five thousand, you can redeem it by paying the two thousand and keep your vehicle.
Chapter 13
Chapter 13, bankruptcy is an excellent way to keep your house if you are so far behind in your debt, and you are facing foreclosure. By filing Chapter 13, you will have three to five years to pay the arrears gradually. Sometimes your payments can be lowered by lowering the interest rate or extending the repayment period.
If you are behind in your debt and worry you are about to lose your home or your vehicle, contact a McAllen bankruptcy attorney to find out how you can keep your assets and eliminate all of you other qualifying debt.