Will I loose my car or house in a Minnesota bankruptcy?

In most areas of Minnesota a car is absolutely necessary. One fear individuals have when contemplating bankruptcy is that their automobile will be lost. The key to remember with a car that has a loan or lien is the debt is secured. Bankruptcy will discharge unsecured debts and will discharge your personal obligation on a secured debt. Bankruptcy will not strip a lien off a car. In the case of a car with a loan, so long as you continue to make payment in most cases you will keep your car. The bank does not want your car back in most case. In some odd cases a bank will want you to sign a reaffirmation agreement in order to retain your car.

In the case of a house located in Minnesota, the same thing goes, not only do you need a place to live but a bank does not want the house the bank wants you to continue to make timely payments. So long as you continue to make timely payments on your house you will keep it. Banks, especially in the case of houses, do not want them back, they would rather you keep making payments because the cost to foreclose is high. If you are behind on house payments a chapter 7 bankruptcy can temporarily stop the foreclosure. If you can bring the payments current the foreclosure will be canceled and the sheriff’s sale will be canceled. For individuals who are months behind a chapter 13 bankruptcy can allow a individual to catch up during the plan. If you have a second mortgage that is fully unsecured (the debt owed on the first mortgage is greater than the value of the house) a MN chapter 13 can strip the lien effectively brining a house that is underwater back closer to the surface.