Secured Debts in Bankruptcy – Defined

What Are Secured debts?

Secured Debts are debts that are ties to your property such as car loans and home mortgages.  Better stated, secured debts are those which the creditor has a claim which secured by property of the bankruptcy estate in accordance with a duly perfected security interest (generally defined as a lien which had been created by an agreement as defined by law, or a nonconsensual lien).  They may also include loans to purchase some appliances and jewelry.  Generally you must reaffirm, redeem or surrender the personal property if there is a lien (security interest).  You must file a statement of your intention to reaffirm, redeem or surrender with the court.  Within 30 days of the meeting of creditors, you must perform the stated intention.  The law is unclear as to what happens if you do not comply with your stated intent.  Some creditors have interpreted the law as giving them the right to repossess the property.

The most common examples of security interest include the mortgage on your home, or the note on your vehicle.  They are considered secure because as we know, if you do not make that mortgage payment, they likely foreclose on your home; if you do not make that car or truck payment, they repossess it.  The reason they can do this, well it because that lien is secured by the property it helped you purchase.

In bankruptcy, you’ll be asked to list all of your debt. this includes secured debt, and unsecured debt.



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O’Fallon, MO 63368

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By: Guss Markwell





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