Keeping Your Home and Car in Chapter 7

You Can Keep Your Home and Car in Chapter 7

A myth about filing Chapter 7 bankruptcy is that you will lose your home and car. In reality, you can keep your home, vehicle or other item securing a loan if you are current in your payments and you can continue to make payments.

What if You Are Behind on Payments When You File?

To be current on a home, vehicle or other item, you can only owe the payment for the month that you file Chapter 7 bankruptcy. If you have a deferment or a modification agreement, it is up to the lender to honor that agreement. If you owe back payments, you may not be able to keep your house or car at all. The same is true if you get behind on payments after you file personal bankruptcy.

If you are behind on your payments, the creditor cannot pursue normal collection actions. Its options are to wait until the bankruptcy case is over and the automatic stay is lifted, or hire an attorney to file a Motion for Relief from Stay. A Motion for Relief from Stay allows the creditor to deal with you directly, rather than pursue payments through the bankruptcy court.

If a lender files a Motion for Relief from Stay against you:

  • You may need to pay the lender's attorney fees.
  • The lender may be signaling that it does not want to work with you or honor a previous agreement.
  • You will likely have to reaffirm the debt in order to keep the collateral.

Note: You only will have to worry about creditor motions if you are behind on payments. If you are up-to-date, you can keep your home and car with little or no objection from the creditors.

How Our Firm Can Help

Law Offices of Robert H. Gourley Jr., P.A., is a skilled bankruptcy law firm in Statesville, North Carolina. We have proudly helped people achieve debt relief for more than 18 years.

When you hire us, a lawyer from our firm will explain to you the bankruptcy process and will help you understand the difference between secured debt (houses, cars) and unsecured debt (credit card debt) for relief purposes. We will review your financial situation and work out a fee agreement that addresses your specific needs throughout the duration of your case.

If a creditor does file a Motion for Relief from Stay, we cannot respond unless it was part of the original agreement. If you want, we can work out an additional agreement to handle the new development.

For more information about Chapter 7 bankruptcy, and to learn if keeping your house and car is a possibility, please contact us for a free initial consultation.

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