Photo by Clayton on Unsplash. Cramdown is often used as a tool to lower monthly payments and the total paid on vehicle loans. This tool also works with other collateral. We’re in a series of blog posts on the best timing for your filing of your bankruptcy case. Last week we got into timing the cramdown of a vehicle loan. … Read More
Whether your creditor has a security interest determines whether it has rights against your vehicle or other collateral. Find out for sure. Reaffirmation vs. Cramdown The last four blog posts have compared Chapter 7 reaffirmation with Chapter 13 cramdown of a secured debt. With reaffirmation you keep the vehicle or other collateral but continue to owe the debt. Usually … Read More
Unsecured debts are not legally attached to anything you own. They have no security. Certain special unsecured debts are “priority” debts. Unsecured Debts Debts that are unsecured are those which are not legally tied to anything you own. The creditor has no “security” attached to the debt, no “security interest” in anything. It has no right to repossess or … Read More
Overall, Chapter 7 deals with simple debts as well or better than Chapter 13 does, which deals with more difficult debts better. Debts in Bankruptcy When deciding between Chapter 7 “straight bankruptcy” and Chapter 13 “adjustment of debts” you look at many factors. You have to meet certain qualifications (usually easy to meet) to file either one. The amount … Read More
The laws about the treatment of different types of creditors can often be used in your favor to pay who you want or need to pay.
Statutory liens survive bankruptcy. Chapter 7 may still be able to help in various ways and be your best solution.
To keep possession of your property that is collateral on a secured debt, you need to give the creditor “adequate protection.”
Here’s a scenario showing how Chapter 13 solves problems that Chapter 7 doesn’t solve in dealing with a creditor’s disputed lien.
Chapter 13 gives you powerful ways to hold onto a vehicle, but it also lets you give up that vehicle without paying its debt.
For a debt to be secured, the creditor has to go through the right legal steps. Otherwise you don’t have to pay the debt.
A secured debt effectively turns into an unsecured debt if you surrender the collateral, which may make sense to do more than you think.
A secured debt can be handled like an unsecured debt if you surrender the collateral, “avoid” a judgment lien, or just keep the collateral.
Because of Chapter 13’s much more powerful automatic stay, its ability to prevent judgment liens and tax liens is extremely valuable.
Creditors with secured debts often have much more leverage against you than with unsecured debts.
Chapter 13 is often a better way to get sell real estate, especially if you have other financial complications.
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