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Does Bankruptcy Demand The Sale Of The House And Car?
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A person need not lose their home or car during bankruptcy as long as the equity in the property is fully exempt. Even if the property is not fully exempt, a person will be able to keep it, if they pay its non exempt value to creditors in a chapter 13 bankruptcy.
Some creditors may have a "security interest" in the home, automobile, or other personal prop¬erty. This means that you gave that creditor a mortgage on the home or put your other property up as collateral for the debt. Bankruptcy does not eliminate these security interests. If you don't make payments, the creditor may be able to take the home or the property, during or after the bankruptcy case and sell it.
With a chapter 13 bankruptcy, you may be able to keep certain secured property by paying the creditor the value of the property rather than the full amount owed on the debt. Or you can use chapter 13 to catch up on back payments and get current on the loan.
There are also several ways that you can keep collateral or mortgaged property after you file a chapter 7 bankruptcy. You can agree to keep making your payments on the debt until it is paid in full. Or you can pay the creditor the amount that the property you want to keep is worth. In some cases involving fraud or other improper conduct by the creditor, you may be able to challenge the debt. If you put up your household goods as collateral for a loan (other than a loan to purchase the goods), you can usually keep your property without making any more payments on that debt.
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