When you file bankruptcy you have to list all of your assets and all of your debts. However, there are numerous “exemption” categories and corresponding equity dollar limits related to each category where your can protect assets from creditors and the bankruptcy court trustee.
For most people, all of their assets fit into an exemption category and you get to keep the assets.
If you have a secured loan attached to an asset, the real question becomes “should you keep it or should you get rid of it and discharge the debt?” It really turns on what you want to do and what makes the most financial sense for you.
The Statement of Intentions generally gives you four options: surrender, redeem, reaffirm and other. The options simply mean that you must choose whether to give up the asset along with the debt, pay off the loan so you can keep the asset, keep the loan and continue paying on it so that you can keep the asset, or propose an additional course of action.
If you reaffirm a home or car loan, you are agreeing to be held legally liable to pay it off. Some car lenders require that you take this step to avoid repossession of your car. You must contact your mortgage lender to find out if it’s necessary to reaffirm your home loan. In most cases, you can just simply continue to make the payments. This means the debt will not be discharged in bankruptcy.
Over the past 29 years, the Law Offices of Christopher A. Benson has helped over 2,300 of Washington clients take control of their financial situation. We can stop your garnishment and change your monthly payments for all your combined unsecured debt, and if you have had more than $600 garnished within the last 90 days, we can get all of the money back in most cases. But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today. Evening and weekend appointments available.
About the Author
Chris served on the Board of Directors for Habitat for Humanity
Seattle/S. King County for 10 years and served as Vice President
of the organization during part of that time. Read More