Naturally when you are claiming bankruptcy you want to know what your options are. Chances are you are fearful that you are going to lose every possession you own. When it comes to secured debt these are a big concern. Your creditors have some type of security against your property, and often this is the property itself. So you could stand to lose your house or car. There are some options available to you in regards to the secured debt. An experienced Kentucky bankruptcy attorney will discuss this with you in detail.
The Secured Debt Difference
What is going to happen depends on the current situation. If you are up to date with your payments on your secured debt you have some choices. You can simply give up the property and that brings the debt owed to an end. You may be able to do what is called a re-affirmation. This means you can make new arrangements and commitments with the creditor that you can and will honor the debt. Or, you can redeem it provide the property is protected by an allowable exemption.
In many cases an individual going bankrupt has fallen behind in their payments on their secured debt, and is not able to get caught up. As soon as you filed for bankruptcy and automatic stay went into effect. While this may stop immediate action, it doesn’t necessarily stop the creditor from pursuing foreclosure or repossession. They are able to petition the courts to have the stay lifted, and in most cases the bankruptcy court will allow this. At the most it buys you a little time.
Sometimes secure creditors get a little nervous when they find out you are going bankrupt and they will automatically want the full payment due. They won’t give you a chance to catch up payments then carry on. You may be able to go for a Chapter 13 bankruptcy, but you need to discuss this with your lawyer.
