Most people who file for bankruptcy in Massachusetts do not lose their home, or their car, or their retirement funds. If you want to keep these, my job is to help you craft a solution that allows you to reach this goal.
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Even if your property is not fully exempt, you will be able to keep it by filing for Chapter 13 bankruptcy rather than Chapter 7 bankruptcy. Remember, different situations require different solutions.
Some of your creditors may have a security interest (like a mortgage) on your home, vehicle, or other personal property. This means that you gave that creditor a lien on the home or put your other property up as collateral for a debt. Bankruptcy does not make these security interests go away. If you don’t make your payments on that debt, the creditor may be able to take and sell the home or the property, during or after the bankruptcy case.
When you file for bankruptcy in Massachusetts, your personal liability on the security interest is discharged. That means if you are unable to pay for the property (car, home, etc.) after bankruptcy and it is repossessed or foreclosed upon, the lender cannot sue or collect from you for any deficiency that may arise. This is especially handy when your home is worth less than the value of the mortgage.
There are several ways that you can keep collateral or mortgaged property after you file 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.
Confused? Don’t worry one of the reasons you need to hire an experienced bankruptcy lawyer for your case is to be sure that you choose the right type of bankruptcy for your situation. All you need to do is contact me for a consultation to talk about your problems and whether bankruptcy is right for you.
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