Quick reply: you possibly can typically maintain the automobile or residence, as long as you retain paying on the mortgage
Lengthy reply: It’s difficult.
While you file chapter, it typically discharges, or wipes out, virtually all your debt. Nonetheless, you possibly can decide and select which secured money owed you’d prefer to maintain. For instance, if you wish to maintain your property mortgage or your automobile mortgage, you verify a field that claims, “reaffirm.” This lets the financial institution know that you simply wish to signal an settlement AFTER submitting the chapter, the place you promise to maintain making the identical funds, steadiness, schedule, and many others.
I’ve written just a few weblog matters on reaffirmation typically, and people hyperlinks are listed beneath.
If you happen to reaffirm the debt, it retains reporting in your credit score, and it’s a must to maintain paying on it. If you happen to fall behind an face a repossession or a foreclosures after signing the reaffirmation settlement, that debt survives the bk, and so they can sue you for the distinction.
(Sure, you possibly can change your thoughts and cancel or rescind a reaffirmation settlement, in some conditions).
However what occurs if you happen to don’t reaffirm the debt? Usually, you give up the collateral (like the house or automobile). In some conditions, you are able to do a “trip by,” the place you trip the automobile by chapter and maintain making funds. They gained’t report it in your credit score, however you possibly can maintain it as long as you keep present.
Some banks gained’t allow you to do a ride-through, and they’re going to nonetheless repossess if you happen to fail to reaffirm.
As for the house, as long as you retain paying on it, it’s yours.
As for “voluntary funds,” effectively, they should say that. When the debt is discharged in chapter, they can’t legally accumulate on it. However if you happen to name customer support and voluntarily make a cost on the mortgage, they’re glad to simply accept your cash. That’s why they maintain saying, “voluntary.” Nobody is twisting your arm and attempting to gather that cost.
Listed here are just a few weblog articles on reaffirmation, vehicles, houses, and never reaffirming: