June 8, 2014
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Good bankruptcy attorneys spend a lot of time talking with their clients. They give them an awful lot of information. Sometimes clients forget.
One of the things clients sometimes forget is the requirement in the Bankruptcy Code that all of their assets and all of their debt must be included in the bankruptcy filing. This includes things that they may want to keep, such as their home or their car. It includes debts that are current and will stay current, such as a mortgage or car loan. It means that if the client says, “I don’t want to include my home/car in the bankruptcy” we will always say, “You need to. But it doesn’t mean that you’ll lose it.”
home and your mortgage or your car and your car loan in your bankruptcy does not mean that you’ll always lose it. The vast majority of my clients keep everything they own in a bankruptcy. In a Chapter 7, so long as your home has no (or minimal) equity or you can exempt any equity, and your payments are kept current on your mortgage, you keep your home. Your car is a bit more complex, due to “reaffirmation agreements” and “retain and pay.” There is a good discussion of this issue here .
In a Chapter 13 case, so long as your post-petition payments are kept current, you keep your home and car.
So including your home and your car isn’t a horrible thing. It’s a necessary thing.