The short answer to this question is simple: no, you cannot choose which debts are in your bankruptcy and you cannot leave any out. When you file bankruptcy, you must list all of your debts, including any secured debts, domestic support obligations, tax debts, and general unsecured debts. You are asked in both your filing paperwork, and while under oath at your 341 meeting, if you included all of your debts and you need the answer to be a simple: “yes.”
How to Keep Secured Collateral in Minnesota
While you must include your secured debts in your bankruptcy, typically you can keep the secured collateral as long as you keep paying on it. An experienced bankruptcy attorney at Kain & Scott can help you navigate any of the nuances with the issue of secured debts. Typically, as long as you continue to pay, you can keep the collateral secured to the debt. This goes for houses and car loans. Your mortgage and car loan must be included in your bankruptcy, but they don’t really go anywhere, because they are still liens on your collateral. In order to keep the collateral, someone has to continue to pay on the lien.
Surrendering Collateral Debt Back to the Lender
Obviously, you can also use a bankruptcy to protect yourself from a secured debt and to surrender the collateral secured to the debt back to the lender. In a Chapter 13 bankruptcy, you actually decide for each of your secured debts whether or not you want to keep the collateral or not. If you want to keep them, your experienced Kain & Scott bankruptcy attorney will make sure your Chapter 13 plan allows for it. If you want to surrender the collateral and protect yourself from the debt, we can label the debt as a surrendered debt in your Chapter 13 plan.
Even a credit card with a $0 balance is likely to close upon filing bankruptcy. This means you want to be careful not to pay off any credit cards in an attempt to keep them out of the bankruptcy. It is basically the equivalent to flushing money down the drain. In addition, if you pay any creditors more than $600 within 90 days prior to filing, the trustee can sue them to get it back which has the opposite result as well.
CALL NOW FOR A FREE STRATEGY SESSION FROM A MN BANKRUPTCY LAWYER AT KAIN & SCOTT
Kain & Scott’s experienced bankruptcy attorneys know how to help Minnesotans find relief from their debts. If you are interested in learning more about how bankruptcy can help with your debts, reach out to Minnesota’s nicest bankruptcy law firm by going now to www.kainscott.com. You will be thankful you did.
