Can I File Chapter 7 Bankruptcy and Keep My House and Car?
Kansas City Chapter 7 Attorneys on What Property You Can Keep
Secured creditors may retain some rights to seize property and to secure an underlying debt even after you receive a discharge. Common secured creditors include mortgage lenders and car financers. However, any loan or debt connected to physical property may qualify the creditor as secured. Depending on individual circumstances, if a debtor wishes to keep certain secured property, such as an automobile, he or she may decide to “reaffirm” the debt. A reaffirmation is an agreement between the debtor and the creditor that the debtor will remain liable and will pay all or a portion of the money owed. This is the case even though the debt would otherwise be discharged in the bankruptcy. In return, the creditor promises not to repossess or take back the automobile or other property so long as the debtor continues to pay the debt.
If the debtor decides to reaffirm a debt, he or she must do so before the court orders the discharge. The debtor must sign a written reaffirmation agreement. Typically, the debtor’s attorney sends the reaffirmation agreement to the creditor for signing. Then, either party can file it with the court. The Bankruptcy Code requires that reaffirmation agreements contain an extensive set of disclosures described in 11 U.S.C. § 524(k).
Reaffirming debts in Chapter 7 bankruptcy allows individuals to keep property that they would otherwise use to repay creditors.
Examples of Non-Dischargeable Debts in Chapter 7 Bankruptcy
A creditor may no longer initiate or continue legal or other action against the debtor to collect discharged debts. However, you cannot discharge all of an individual’s debts in Chapter 7 as described in 11 U.S.C. § 523(a).
Debts not discharged include:
- Debts for alimony and child support
- Certain taxes
- Debts for certain educational benefit
- Overpayments or loans made or guaranteed by a governmental unit
- Debts for willful and malicious injury by the debtor to another entity or to the property of another entity
- Debts for death or personal injury caused by the debtor’s operation of a motor vehicle while the debtor was intoxicated from alcohol or other substances
- Debt for certain criminal restitution orders
The debtor will continue to be liable for these types of debts to the extent that they are not paid in the Chapter 7 case. Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for willful and malicious injury by the debtor to another entity or to the property of another entity will be discharged unless a creditor timely files and prevails in an action to have such debts declared non-dischargeable.
Will I Lose Everything If I File Bankruptcy?
Our Chapter 7 attorneys believe that bankruptcy is a useful tool for those looking to handle debts and save possessions. Every state has exemption laws that protect most, if not all, household goods when an individual or couple files for bankruptcy. This includes both Missouri and Kansas. To ensure debtors are able to keep their household goods, let your attorney know your household goods and their value. While it can occur, the chances of unexpectedly losing any household property through a bankruptcy are small.
With our over 30 years’ combined legal experience, the Chapter 7 attorneys at The Sader Law Firm pride themselves on being able to simplify the bankruptcy process and file cases quickly and accurately. We will do everything we can to make sure you do not lose the assets you worked so hard to gain. To start on your road to financial recovery, call us at (816) 561-1818. We can then schedule your free and honest bankruptcy assessment over the phone. In 10 to 15 minutes, you can learn if filing Chapter 7 or another chapter is right for you.