Many clients I meet with are concerned that they will have to surrender their house and car if they file bankruptcy. As long as you can afford to maintain the payments on the mortgage and car note, you will not lose either in a bankruptcy filing. Most states provide exemptions for your house and car which allow additional protection for these assets.
In addition, for those who have fallen behind on mortgage or car payments, Bankruptcy may actually provide a favorable option to keep these assets and catch up on payments over time. A Chapter 13 Bankruptcy, which typically takes 36-60 months to complete, places debtors on a payment plan which commits their disposable income to their creditors. This is beneficial for debtors who experienced a temporary setback, just as a loss of job, and needs additional time to catch up on car payments or mortgage arrears. In the Chapter 13, the arrears are spread out over the length of the bankruptcy plan, providing a manageable payment arrangement as opposed to trying to catch up in one lump sum. Keep in mind that you are still responsible to maintaining regular monthly payment to the mortgage or car creditor during the bankruptcy in the event these are listed as a pay direct obligation and the monthly payments are not part of your bankruptcy plan, which varies from district to district.
If you have questions regarding your assets, exemptions, or Chapter 13 payment plans, contact an Austin bankruptcy attorney today at 866-705-7584 or send an email to email@example.com.