Debtor FAQ's

How do I deal with secured debts in Chapter 7?

When a debt is secured, the creditor has rights in the security (or collateral) in addition to the rights against the debtor. The debtor's personal liability may be discharged in Chapter 7 while lien rights in the collateral pass through bankruptcy unaffected unless they are avoided or stripped down. When the lien cannot be avoided, the debtor gets choices about how to provide for the creditor's rights in the collateral.

Long term secured debt like mortgages pass through the bankruptcy unaffected by the discharge. Most creditors secured in real property are happy to continue receiving payments on the debt, so long as you are current.

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