Can I Get Rid Of My Mortgage And Keep My House? Can I Keep My Car And Get Rid Of My Car Loans?


Phoenix Bankruptcy Lawyer: Can I Get Rid Of My Mortgage And Keep My House? Can I Keep My Car And Get Rid Of My Car Loans? An experienced Arizona bankruptcy lawyer answers your questions about secured debt here.

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I have noticed there is a good amount of confusion when it comes to secured debts. It is understandable, really. Every time you enter into a financial agreement – buying a home, securing a car loan, applying for credit cards – there are pages and pages of information spelling out the terms of the agreement. Unfortunately, they are usually written in size 2 font and contractual language. My eyes hurt just thinking about it.

I think it is near impossible for clients to understand what is going to happen with their loan in bankruptcy, if they do not understand the original terms of their contract. It is no wonder I have clients that come to me wanting to erase a debt in bankruptcy (say a mortgage or car loan) without having to turn over the property securing it. Shame on you, loan companies, for not including client education as part of your loan terms.

Before we get too deep into this conversation, let me first give a brief introduction to secured debts. A secured debt is one in which the creditor has rights in the security (think collateral property – something that the creditor can take in the event of default) and against the debtor in the form of personal liability (think lawsuit – the creditor can file suit against a individual that defaults on a loan).

Let’s consider a standard car loan. These are secured loans which means that, if you read above, you know that there are two ways the creditor is protected. One way is by your personal liability towards the loan. If the car is taken by aliens – and your insurance won’t cover it – you are still liable for the debt. The second protection is via the car itself.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Christopher Ariano, Ariano and Associates, PLLC | Attorney Advertising

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