Myth Two: You will lose important assets.
One big reason people hesitate to file bankruptcy is the fear of losing important assets. If you’re concerned about your house and cars, it’s time you know the truth.
Let’s dispel Myth Two: You Will Lose Important Assets.
The truth is: Bankruptcy can help you keep your house and your car. In fact, bankruptcy can stop foreclosure, prevent a bank from repossessing vehicles and even get your car back if it has been repossessed.
If you own a home, you can still file bankruptcy. Whether you file a Chapter 7 bankruptcy or a Chapter 3 bankruptcy depends on whether or not you have equity in your home.
If you are at risk of losing your home in foreclosure, you may have tried to obtain a loan modification and been told you do not qualify. Or, perhaps, you were offered a modification you cannot afford. Chapter 13 bankruptcy may give you the edge you need to qualify for a loan modification. Bankruptcy allows you to catch-up on your overdue payments (arrears) over a five-year period and in some cases eliminate a second mortgage. At the same time, you may also be able to eliminate or significantly reduce credit card and other consumer debt.
If you have a car with a loan, you may be able to keep your car if you sign a re-affirmation agreement or are able to redeem your car. You also may be able to force the lender to reduce the principal balance to the current value of the car and/or reduce the interest rate to a reasonable level.
If your car has already been repossessed you have a short time (usually less than 2 weeks but this will depend on the lender and the laws of your state) before the lender sells it to someone else. If the car is sold and title passes to a third party, you normally cannot get the car back. However, if the car has not been sold yet, you still have a chance to get it back because the automatic stay will stop the sale. But you must act quickly and file before the sale if you wish to get your car back.
For other types of assets there are specific exemptions that can allow you to keep those assets. This is where an experienced bankruptcy attorney can make all of the difference.
Don’t be fooled by the myths of bankruptcy. Get good advice form a qualified bankruptcy lawyer in New Jersey before you file bankruptcy.