Gauss Law Firm- Denver Bankruptcy Lawyers

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DO I STILL OWE ON SECURED LOANS AFTER I FILE BANKRUPTCY
 
Yes and No
  
The term “secured debt” applies when you give the lender a mortgage, deed of trust or lien on property as collateral for a loan. The most common types of secured debts are home mortgages and car loans. The treatment of secured debts after bankruptcy can be confusing.Bankruptcy cancels your personal legal obligation to pay a debt, even a secured debt. This means the secured creditor can’t sue you after a bankruptcy to collect the money you owe.
 

Understand that your personal liability on the mortgage is now discharged, if you undertake to modify your loan or do a short sale post filing, you may lose this protection. Please call your lawyer before doing or signing anything with respect to your mortgage or car loan post filing. Work done related to this issue is excluded from your flat fee initial fee agreement.
 
But, and this is a big “but,” the creditor can still take back their collateral if you don’t pay the debt. For example, if you are behind on a car loan or home mortgage, the creditor can ask the bankruptcy court for permission to repossess your car or foreclose on the home. Or the creditor can just wait until your bankruptcy is over and then do so. Although a secured creditor can’t sue you if you don’t pay, that creditor can usually take back the collateral.
 
For this reason, if you want to keep property that is collateral for a secured debt, you will need to catch up on the payments and continue to make them during and after bankruptcy, keep any required insurance, and you may , although this is unlikely, have to reaffirm the loan.
 

What Is Reaffirmation?
  
Although you filed bankruptcy to cancel your debts, you have the option to sign a written agreement to “reaffirm” a debt. If you choose to reaffirm, you agree to be legally obligated to pay the debt despite bankruptcy. If you reaffirm, the debt is not canceled by bankruptcy. If you fall behind on a reaffirmed debt, you can get collection calls, be sued, and possibly have your pay attached or other property taken. Its is absolutely not necessary to reaffirm a home loan, and while technically necessary to retain a car/car loan, most lenders let you keep the property anyway as long as you stay current. For this reason it is often(almost always) a poor choice to sign a reaffirmation on a home or a car.
Yes and No
  
The term “secured debt” applies when you give the lender a mortgage, deed of trust or lien on property as collateral for a loan. The most common types of secured debts are home mortgages and car loans. The treatment of secured debts after bankruptcy can be confusing.Bankruptcy cancels your personal legal obligation to pay a debt, even a secured debt. This means the secured creditor can’t sue you after a bankruptcy to collect the money you owe.
 

Understand that your personal liability on the mortgage is now discharged, if you undertake to modify your loan or do a short sale post filing, you may lose this protection. Please call your lawyer before doing or signing anything with respect to your mortgage or car loan post filing. Work done related to this issue is excluded from your flat fee initial fee agreement.
 
But, and this is a big “but,” the creditor can still take back their collateral if you don’t pay the debt. For example, if you are behind on a car loan or home mortgage, the creditor can ask the bankruptcy court for permission to repossess your car or foreclose on the home. Or the creditor can just wait until your bankruptcy is over and then do so. Although a secured creditor can’t sue you if you don’t pay, that creditor can usually take back the collateral.
 
For this reason, if you want to keep property that is collateral for a secured debt, you will need to catch up on the payments and continue to make them during and after bankruptcy, keep any required insurance, and you may , although this is unlikely, have to reaffirm the loan.
 

What Is Reaffirmation?
  
Although you filed bankruptcy to cancel your debts, you have the option to sign a written agreement to “reaffirm” a debt. If you choose to reaffirm, you agree to be legally obligated to pay the debt despite bankruptcy. If you reaffirm, the debt is not canceled by bankruptcy. If you fall behind on a reaffirmed debt, you can get collection calls, be sued, and possibly have your pay attached or other property taken. Its is absolutely not necessary to reaffirm a home loan, and while technically necessary to retain a car/car loan, most lenders let you keep the property anyway as long as you stay current. For this reason it is often(almost always) a poor choice to sign a reaffirmation on a home or a car.