What Debts Will You Be Able To Keep After Filing Bankruptcy?
The bankruptcy code requires that you disclose all of your assets and debts in your filed bankruptcy petition, even if you want to keep paying on some of those listed debts. Your bankruptcy schedules indicate these debts you intend to continue paying.
It is common for people to keep their house and cars, and continue paying home and auto loans after receiving their bankruptcy discharge. The following types of loans are frequently kept even after a bankruptcy:
You can continue to make payments on your home mortgages and re-obligate yourself to your original loans as long as you remain current on your mortgages and the trustee determines that your bankruptcy is a “no-asset” case. Your mortgage company may request that you sign a reaffirmation agreement that re-obligates you to the original terms of the loan. However, instead of reaffirming your mortgage, you may want to surrender your house to the mortgage company and discharge your home loans in bankruptcy. Consult with a bankruptcy attorney for specifics on this important issue.
You can also re-obligate yourself to the terms of an auto loan by filing a reaffirmation agreement with the bankruptcy court. You can also decide to surrender the car back to your lender and eliminate your deficiency balance in the bankruptcy. In some states, it’s possible to redeem your car and buy it back for fair market value instead of the total amount due on the contract. Consult with a local bankruptcy attorney to find out which option is best for you.
A creditor may allow you to keep the line of credit open if you reaffirm a credit card debt, but it is usually advisable to eliminate all your credit card debt in a bankruptcy. You are not required to list a credit card if it has a zero balance when you file bankruptcy, but it is possible that the creditor may see the bankruptcy on your credit report and choose to cancel your account regardless.
Other Unsecured Loans
Credit unions may require you to sign a reaffirmation agreement if you want to keep your account and future lending privileges with them. They usually keep your account in good standing if you are willing to pay them back. You can always choose to pay a discharged creditor back should you choose to do so.