Secured Debt-Lawyers Modesto, CA

A secured debt is linked to a specific piece of property like a car or a home. When you finance a car or home it’s secured debt because lender can take the property back if you don’t make payments. A credit card is different because if you don’t make payments on your credit card there is no collateral to take. That’s why credit cards are considered to be unsecured.

Secured Debt and Filing for Bankruptcy-Modesto, CA Attorneys

If you are going to file for bankruptcy and you are current on your secured debt, then you should be able to keep it. Keep in mind that if you choose to keep your car or home in the bankruptcy, then your obligation to pay the underlying debt remains. You can’t file, get rid of the loan, and keep the property.

Getting rid of loans and liens-Attorney Modesto, CA

If you have a secured debt such as a car and you want to get rid of it, you can simply “surrender” it in the bankruptcy petition. The lender can come pick it up or you can drop it off. The same goes with your house. If you have property that has a lien on it because someone sued you and got a civil judgment, you can get rid of this in the bankruptcy by filing a motion.

Stripping off your 2nd mortgage-Lawyers Modesto, CA

You can get rid of your 2nd mortgage only in a chapter 13 bankruptcy and only if the value of your home is worth less than what you owe on your first mortgage. If you decide to file a chapter 7 and want to keep your home, then your 2nd mortgage is staying with you. If the value of your home is worth more than what you owe on your 1st mortgage, then a chapter 13 probably isn’t right for you.