Will I Lose My House or Car During Chapter 7 Bankruptcy?
Many of my clients have worried about it, and you may be worrying too—will secured items such as real estate and vehicles be at risk during the Chapter 7 Bankruptcy case? In most cases, no!
While you are in a Chapter 7 bankruptcy case, you will still need to pay all of your secured payments. “Secured” payments are payments made towards a loan with collateral, such as a home or car. It is imperative that all payments are made in a timely fashion so that you (the debtor) are afforded the chance to sign a Reaffirmation Agreement.
A Reaffirmation Agreement is an agreement between the debtor and the lender, to remove the discharge protection for the debt while you continue to make the payments. In return, the collateral can be kept. Additionally, once the Reaffirmation Agreement is filed with the Bankruptcy Court, the lender is required to report all timely payments made to the credit reporting bureaus—which will help your credit score increase!
In many cases, individuals filing for Chapter 7 bankruptcy will be able to keep their home and car. It is always important to continue paying in a timely fashion, which will help to begin the rebuilding process for your credit and help with the fresh start you deserve!
Find out what you could face in your Chapter 7 Bankruptcy case. Call our bankruptcy attorneys in Columbus today and find answers!