Will You Lose Your House or Car if You File for Chapter 7 Bankruptcy?

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Attorney David Shuster | 888-365-0921 | Free Consult

Will you lose your hour or car if you file for Chapter 7 bankruptcy?

David Shuster is a Texas bankruptcy attorney with Shuster Law, PLLC in the Dallas—Fort Worth area. In this Quick Question, he explains that in many situations, you can keep your house and car when you file for bankruptcy due to the automatic stay that immediately goes into effect.

To learn more, contact the attorney directly by calling 888-365-0921 or by submitting a contact form on this page. The consultation is free and confidential, and you owe no out-of-pocket attorney fees.

In most cases, Chapter 7 bankruptcy filers can keep their car and home.

As long as the filer is not so far behind on their home payments that the house is in foreclosure, or so far behind on car payments that it is going to be repossessed, the filer should get to keep these assets. Most often, these kinds of loans are considered “secure” loans, and as long as the filer can continue to make payments on them, there is no need to sell or surrender these assets.

Even in cases where payments might be late on a car or home loan, as long as the filer is arranging to catch up on those late payments and continue paying off the rest of the loan, there should be no questions as to their keeping the property.

In most cases, payments regarding secured home and car loans can continue as usual.

Unless dealing with a situation such as the exception mentioned above, payments to be made on home and car loans after filing for a Chapter 7 bankruptcy will continue as usual. If necessary, the filer may attempt to discuss an alternate rate with the loan holder regarding how much they will be expected to pay each month. In some cases it may be possible to reduce monthly payments until the filer is back on their feet.

Dealing with creditors and filing for bankruptcy can be a complicated process. It’s a good idea to talk to a bankruptcy attorney before taking either of these steps to make sure you are protecting yourself in every possible way, and know what to expect in regard to the process, continued payments, as well as what property will be exempt.

To learn more, contact David Shuster directly by calling 888-365-0921 or by submitting a contact form on this page. The consultation is free and confidential, and you owe no out-of-pocket attorney fees.

Video Transcript:

Christine Haas:

Will I lose my house and my car if I file for bankruptcy? We asked Texas Attorney David Shuster in this AskTheLawyers.com Quick Question.

David Shuster:

As long as you’re paying for your home and car, or you’re not so far behind on the home and car as to cause the home to be in foreclosure or the car could be in repossession, then it’s the exact same as again, if you were in or if you didn’t file a bankruptcy. It’s kind of business as usual, but without the debt that you’d discharge. So what you’re talking about are loans that are secured, there’s liens, right, so the creditor has its right to exercise and foreclose on its lien repo, foreclose, or whatever.

So those rights exist in bankruptcy or out of bankruptcy, and so you do have an automatic stay where they can’t exercise those rights while you’re in bankruptcy. But again, if you’re making payments or you’re making some arrangements to get caught up on the late payments, then you’re not gonna lose those things in the Chapter 7 bankruptcy.

Disclaimer: This video is for informational purposes only. In some states, this video may be deemed Attorney Advertising. The choice of lawyer is an important decision that should not be based solely on advertisements.