We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

In determining whether property is exempt, you must keep a few things in mind. The value of your property is not the amount that you paid for it, but it is what the property is worth now if you sold it. This may be substantially less than what you paid for the property, especially if the property is an automobile or furniture or other property that usually depreciates over time. It is also important to remember that exemptions are used to protect your equity in property. This means that you count your exemptions against the full value of the property minus any money that you owe on debt that is secured by the property. For example, if you own a $100,000 in North Carolina with a $85,000 mortgage, then you have $15,000 equity in this property, and this equity would be exempt if the North Carolina exemption laws were applicable.

While your exemptions allow you to keep property from your creditors, even in a Chapter 7 bankruptcy proceeding, your exemptions do not prevent your secured creditors from repossessing their collateral, after obtaining Court permission in most cases, if you are behind in your payments and you file a Chapter 7 bankruptcy petition. In a Chapter 13 bankruptcy proceeding, you can retain property that serves as collateral for your debts, even if you are behind in your payments to the secured creditors, as long as you can afford to make the payments that are required by various provisions of the United States Bankruptcy Code.

In most cases, you will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt and you continue to make all of your required payments in a timely fashion. In other words, even if you own property that is not fully exempt, you will be able to keep it if you pay its non-exempt value to creditors in a Chapter 13 bankruptcy proceeding through your monthly payments to the Chapter 13 Trustee. However, some of your creditors may have a security interest in your home, automobile, or other personal property. This means that you gave such creditors a mortgage on your real estate or agreed to put up other property as collateral for the loan. Bankruptcy does not make these security interests go away. If you do not pay your secured creditors on these debts, then these creditors may be able to take and sell the collateral during or after the bankruptcy case. There are several ways that you can keep collateral or mortgaged property after you file bankruptcy. If you are current in making your regular monthly payments to the secured creditor, you can continue to make the regular monthly payments to the creditor and abide by all terms of your loan agreement with that creditor. If you are behind in your regular monthly payments to a secured creditor and you file a Chapter 13 case, then you may be able to reduce the amount of monthly payment to be paid to the creditor through your Chapter 13 plan payments. Generally speaking, you probably will not be able to reduce the amount of your monthly payments to your mortgage company, but you may be able to catch up the payment arrears that you are behind over an extended period of time through your Chapter 13 plan. If you are behind in your regular monthly payments to a secured and you file a Chapter 7 case, then you have three options concerning the collateral. First, you can return the collateral to the secured creditor, and, in most cases, your personal liability to this creditor will be discharged or wiped out. Second, you can sign a new agreement (a reaffirmation agreement) with the creditor in which you agree to keep making regular monthly payments to the secured creditor until the debt is paid in full in exchange for the secured creditor’s promise to allow you to keep possession of the collateral. If you sign such an agreement, your personal liability to that creditor is not discharged in your Chapter 7 bankruptcy case. Finally, you can pay the secured creditor the value of the property (often an automobile) that secures the creditor’s claim in one lump-sum payment. Most Chapter 7 debtors do not have the ability to come up with a large lump-sum payment to a secured creditor. Therefore, this option is usually not a viable alternative for most Chapter 7 debtors. However, there are some financial institutions that provide services that may allow a Chapter 7 debtor to borrow money to finance such a lump-sum payment.

In certain circumstances, you may be able to challenge a debt that you owe to a creditor who has engaged in improper conduct. In addition, if you listed your household goods as collateral for a personal loan (other than a loan that you obtained to pay the purchase price of such household goods), then you may be able to keep your household goods while paying the creditor substantially less than the outstanding balance due on that loan. Finally, it is sometimes possible to void or wipe out liens on property that arise from judgments against you.