Chapter 7/13 Bankruptcy

[mark1210]

What is the name of your state? TX


I am interested in finding out more about chapter 7 and 13 bankruptcy. My question is with chapter 7 what happens to my house and car? I keep hearing conflicting information that both are "washed clean and clear". Certainly this can't be right....I don't see them giving a home for free for someone to turn around and just sell shortly thereafter.

From my understanding filing chapter 7 only elimates credit card debt and other unsecured type loans. Am I correct? If so, is there anything out there to help with mortgage/car loan?

Thanks,
Mark

 

[Ladynred]

Neither Chapter will wipe out secured debt.

In a CH 7, you generally reaffirm on mortgages and, if required, on car loans. Not all states require reaffirmation to keep secured property. In some states as long as you keep paying you keep the property, and the debt is discharged. If you stop paying, a car can be repo'd and a home foreclosed on but without a reaffirmation you would have no liability for deficiency that may result from the sale of the property. All unsecured debts are discharged approximately 60 days after the 341 meeting of creditors as long as there are no objections filed.

In CH 13, secured debts are paid at 100%, while unsecured may only be some percentage. At the end of the Ch 13 plan period, any unsecured debts left are discharged, any amounts of the secured debts not paid in full you must continue to pay. Ch 13 is 3-5 years on a very strict budget, all disposable income goes to the Trustee to pay your creditors.

To learn more about each type, I suggest you start reading here:
www.thebankruptcysite.com