One of the reasons people fail to secure proper debt relief solutions is due to fear of losing their property or assets. Much of this fear stems from myths about bankruptcy and a lack of understanding how the bankruptcy process works. Unfortunately, this often leads people to sit by and not take action; ultimately putting them at greater risk of the negative outcomes of debt. In many cases, filing for bankruptcy could offer greater protection of your assets and property than doing nothing to resolve your debts.
Keep Your Property
There are two main types of loans: secured and unsecured. In a secured loan, such as a car or mortgage, the property items are used as collateral on the loan. Therefore, if the borrower defaults on a secured loan, the lender has the right to seize or repossess this property.
When you file for Chapter 13 bankruptcy, it provides protection from creditors seizing the property. The reason is that a Chapter 13 case includes a repayment plan designed to roll your missed payments into one monthly payment. These payments go towards satisfying the portion of your debt that you will repay in your repayment plan divided among creditors. As long as you keep up your Chapter 13 payments as outlined in the plan, creditors cannot touch your property.
If you are facing repossession, foreclosure, or are concerned about your assets being liquidated in a Chapter 7 bankruptcy; contact a Sacramento bankruptcy lawyer to review your financial profile and guide you in the best path to debt relief for you.