What About Secured Debts?

What Happens to Secured Debts in Your Ohio Bankruptcy?

A secured debt is any collateralized loan (such as your mortgage or car loan) in which creditors can take back the property or collateral if you default on payments.

In bankruptcy, unsecured debts (such as credit cards or medical bills) are discharged or spread out over time, but you will have to make a choice regarding your secured debts: keep making payments, surrender the asset or "buy it back" from the bankruptcy trustee. The bankruptcy lawyers of Stamps & Stamps, Attorneys at Law, can analyze your case to help you decide whether to keep the asset or walk away.

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Dayton Secured Debt Attorneys

Bankruptcy provides strategies for retaining assets as well as opportunities to surrender property without owing the arrears. Attorney Eric Stamps provides the experienced counsel to help you take full advantage of bankruptcy.

Chapter 7 bankruptcy is an option if you are current on your mortgage or car payments, but want to walk away and cut your losses. Chapter 13 may be the solution if you are behind on your payments and want to stay in your home or keep your vehicle. Filing for bankruptcy stops foreclosure and avoids repossession, at least temporarily, and indefinitely if you continue paying on the loan.

Mr. Stamps will walk you through your options so you can make the right choice:

  • Reaffirmation in a Chapter 7 is an agreement with the lender to keep your house or car by continuing payments. This can re-establish good credit and make the bank or mortgage company more open to renegotiating the terms of the loan. If you stop payments, foreclosure or repossession will commence again and you may be on the hook.
  • Pay and stay is an option if you are not certain about the future. As long as you keep up with the payments, you can stay in the house or keep your car without reaffirming the loan, but you can stop paying and walk away at any time without being responsible for the remainder of the payments. This can have a negative effect on your credit.
  • Surrendering property to the Bankruptcy Court in a Chapter 7 or Chapter 13 may be the wise choice if you know you cannot afford it. Any arrears may be discharged.
  • Redemption is an agreement with the bankruptcy trustee to keep nonexempt property that would otherwise be forfeited in a Chapter 7 bankruptcy. For example, if you wanted to keep heirloom jewelry or a motorcycle, or if you have excess equity in your car or house, you can redeem the property for the current value or pay the difference.
  • Cramdown is a benefit of reaffirming your car loan in a Chapter 13. If you have had the car for at least 910 days and owe more than it is currently worth, bankruptcy can restructure the loan to the present market value and a lower interest rate.

Alternatives to Home Foreclosure and Car Repossession

Stamps & Stamps, Attorneys at Law, can address your secured debts on a case-by-case basis, including homes, cars, appliances, computers, boats or any property bought on credit. Eric Stamps will explain your options to you and help you make decisions in your best financial interests.

We offer a free initial consultation to answer all your questions, serving the Dayton area and surrounding counties of Ohio. Call us at 937-410-0378 or 888-435-0085, or contact us online.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.