What is a Chapter 7 Bankruptcy in Raleigh, NC?
The Chapter 7 process is quick,
and it is the cheapest bankruptcy. It also offers you almost all the benefits of bankruptcy. It usually only takes about 120 days. It is often the best way to deal with a predatory mortgage where you owe 125% of the value of a home or you have a high-interest rate.
It allows you to
repair a poor credit rating and purchase houses and cars shortly after filing. Repairing your credit is done by making prompt payments on remaining accounts after you file. If you had bad credit before you filed a bankruptcy, Chapter 7 is a chance to repair your credit. A Chapter 7 bankruptcy can be reported on your credit report for 10 years, but your present bad credit will be reported for 7 years after the last collection action (which can make it last far longer than 10 years). Most people who file bankruptcy already have damaged credit, so a Chapter 7 bankruptcy is unlikely to harm it much more.
What Can I Do with Secured Debt in Chapter 7 Bankruptcy?
- Reaffirm the debt – If your payments are not current, you can try to negotiate a reaffirmation agreement with the creditor that allows you to catch up your payments. The downside to reaffirmation agreements is that signing one reinstates your personal liability for the debt. Should you decide in the future that you cannot pay the debt, you will be liable for it as if you had not filed bankruptcy.
- Redeem the property – You may redeem the collateral by paying the creditor what it is WORTH rather than what you OWE on it. For example, if you have a car worth $5000 and you owe $15,000 on it, you would pay the creditor $5000 for the car. The downside is that you have to make a lump sum payment. In the case of vehicles, you may be able to finance redemption through a particular company, and we are happy to provide you with their contact information.
- Surrender the property – Give the property back to the creditor (“surrender”) and have the debt discharged. If you choose to surrender property, you generally must comply within 45 days of filing your Statement of Intention (which is generally filed as part of your bankruptcy petition). Creditors will generally contact you to facilitate return of collateral, and many times it is not worth their effort to collect the property. If you are surrendering a car, however, we do recommend that you contact the creditor and make arrangements to drop off the vehicle.
- Real Estate – view “Mortgage in a Chapter 7 Bankruptcy”.