Losing your car or house during the bankruptcy process can be tough to stomach. Fortunately, you may not have to give up all your property. Certain items are exempt from liquidation, and you could also draft a payment plan that allows you to keep some of your personal property.
Preventing repossession during bankruptcy in Jacksonville works differently depending on what chapter of the Bankruptcy Code you are filing under and the type of property you are trying to keep. Either way, getting help from a trustworthy bankruptcy lawyer could be the key to maximizing the assets you can retain while seeking relief for your debts.
How an Automatic Stay Impacts Repossession in Jacksonville
Submitting a bankruptcy petition could prevent you from having your property repossessed for a short time. Once a court receives your filing, they will issue what is known as an automatic stay to all creditors listed in the petition, informing them that you have filed for bankruptcy. A creditor must cease all collection activities until the conclusion of the bankruptcy process unless it gets permission from the bankruptcy judge to proceed.
Once the bankruptcy filing triggers the automatic stay, creditors can only interact with the court overseeing your case or your attorney. A bankruptcy judge will sometimes allow a secured creditor to proceed with repossession if, for instance, the debtor does not intend to keep the collateral. So, if you want to avoid repossession after declaring bankruptcy, you may need to take further action with the help of a nearby lawyer.
Keeping Property After Filing for Chapter 7 or Chapter 13 Bankruptcy
Generally, bankruptcy petitioners who want to keep property associated with secured debts will need to file for Chapter 13 bankruptcy. This chapter of the Bankruptcy Code allows borrowers to create 36 to 60-month debt repayment plans, which improves cash flow and helps achieve financial stability over time. If you file under Chapter 13 and successfully fulfill the terms of your repayment plan for a specific piece of property, you should be allowed to keep it.
Chapter 7 bankruptcy is a more straightforward process compared to Chapter 13, but it usually does not allow a filing party to avoid repossession of property on which they owe secured debts. However, under 11 United States Code §722, a debtor may be able to “redeem” property meant for “personal, family, or household use” after filing under Chapter 7. Redemption is a Chapter 7 tool which allows a debtor to pay only the fair market value of the collateral securing a loan rather than the actual balance owed.
A Jacksonville Attorney Could Help You Prevent Repossession During Bankruptcy
Working with a legal professional could help you avoid repossession and keep your property for as long as possible.
Whatever your financial situation is, you should talk to a qualified attorney with experience preventing repossession during bankruptcy in Jacksonville. Call us today to find out how our firm could help you protect your personal property.