If you have filed for Chapter 7 bankruptcy in Florida or anywhere throughout the United States, you are not alone. Close to one million people in the U.S. filed for bankruptcy last year alone. The most common type of bankruptcy filed is Chapter 7 or liquidation bankruptcy. Under Chapter 7, the trustee appointed to oversee your case will determine whether the court will repossess any of your property in order to repay creditors. Other creditors, such as financial institutions, may also reclaim their property if you fail to repay your loan. In some cases, you may wish to give up any liability you have on these types of loans and start over. There are ways, however, that you can reclaim certain types of debt and keep possession of your property during a Chapter 7 bankruptcy.
During the bankruptcy process, you may be asked if you wish to reaffirm debt that you owe. The financial institution would often times rather have you reclaim the debt, continue making payments on your loan and keep your property rather than lose the money that you owed to them. They may be willing to reinstate your loan with a lower interest rate and lower, more manageable monthly payments. This will help you keep your home, vehicle and other secured debts while making smaller payments each month.
During your meeting with the court-appointed trustee, you should be informed of how to reaffirm debt and the potential benefits and drawbacks of doing so.
This information is intended to educate and should not be taken as legal advice.