Among the very first questions people ask Jack Setters when they’re considering bankruptcy is whether they could keep their house and car. For the majority of people, these are one of the most beneficial things they have, as well as they don’t wish to lose them in any way.
Your House in Chapter 7 Bankruptcy
If you declare Chapter 7 personal bankruptcy— the kind that gets rid of financial debt most quickly– you could keep your house under two conditions: You’re current with your mortgage payments when you file (or you’ve recently gotten current via a loan modification), or the state regulations allow you to keep (“exempt”) all the equity you have in the property. By offering you relief for various other types of debts, like bank card or medical bills, bankruptcy can release your money to keep up your mortgage.
If you’ve already fallen behind on your mortgage payments when you apply for Chapter 7 bankruptcy, you’re most likely to lose your property. Declaring bankruptcy allows you remain in your house for an additional month or more, but inevitably, the bank will foreclose on the building. Though if the foreclosure sale price is less than just what you owe on the home mortgage, your current mortgage debt can be discharged in bankruptcy.
Your House in Chapter 13 Bankruptcy
When you’re behind on your home mortgage payment but want to keep your home, Chapter 13 bankruptcy might give you the time you should catch up. Under this type of bankruptcy, the court approves a plan for you to repay the past-due mortgage amounts over 3 to 5 years, while making your current loan payments. As long you keep up with both of those payments, your lender can’t confiscate your house.
Your Car in Chapter 7 Bankruptcy
Along with the house, you could keep your car in Chapter 7 bankruptcy if you’re current with your loan repayments (or the car is paid off), as well as your state’s laws allow you to protect your equity in the vehicle.
Many lending institutions will certainly enable you just to keep making payments on your car loan after you declared bankruptcy, however they potentially can repossess the vehicle (also if you don’t fall behind on those repayments) unless you “reaffirm” the financial debt by consenting to a new agreement.
If the car costs less than the balance on your loan, you could ask the court to let you “redeem” it by paying a large amount of money for its value — that is, if you can somehow find the necessary. Otherwise, you can surrender your car and wipe out your debt in the bankruptcy.
Your Car in Chapter 13 Bankruptcy
If you’re behind on your car loan, you can use a Chapter 13 strategy to catch up with your overdue payments (as with home mortgage financial obligation), but you also have some other alternatives that do not apply to house loans. In Chapter 13, you may be able to stretch out the car payments over a longer period. Or, if the car loan is old enough, you even may lower the balance on the principal and your interest rate.
Obviously, every person has own story which should be provided with individual approach. With 20 years or professional experience, Jack Setters will handle your case. Contact Jack Setters today to schedule a consultation, and “fight back with Jack!”