Can I Give Up my House or Car in a Missouri or Illinois Bankruptcy?

People often wonder what will happen to their property in a Missouri or Illinois Chapter 7 bankruptcy. A St. Louis bankruptcy attorney is prepared to help you make whatever decision you think is best but you do have three choices: reaffirm, redeem or surrender the property. Where do you go from here?

Of course, a qualified and experienced St Louis bankruptcy attorney can help you decide what would be best for your situation but, ultimately, it is your choice. The first option is reaffirm. If you choose to reaffirm, you make the same payments you've been making all along instead of getting rid of the debt. For example, if you decide to reaffirm your car, you will simply continue to make your car payments as you did before. Keep in mind, if you don't make your payments, the lender will still be able to take your property in this scenario.

A lot of people choose to reaffirm their property in order to keep it in a Chapter 7 bankruptcy in Missouri and Illinois. If enough of your income is freed up by the other debts that eliminated in your bankruptcy, then you may just be able to keep your property without a headache! If, however, you think the payment still may be hard to make, you might want to look at other options.

The second option is to redeem the debt. Redeeming the property allows you to pay only the market value and keep the property. For example, if your car is worth $4,000 but you owe $6,000, you would pay the lender $4,000 and keep the property.

This option sounds wonderful considering you can save several thousand dollars but the payment must be in a lump sum, which is a hard way for most people to pay. There are some companies, however, that do redemption loans, which could save you the headache of coming up with the money out of pocket.

You can also choose to surrender, or give up, the property. By surrendering your property, you give it back to the lender and get rid of the debt. While this may not sound like an appealing option, it might be a good idea. If the payments you are currently making are giving you a hard time, surrendering the property means you can be free of the responsiblity of the debt and start over. Your income can finally be yours again.

The decision is yours but it is typically pretty clear what the most responsible and best decision for your budget will be.


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Missouri Bankruptcy attorney James Brown has been working to relieve the debt of hard-working American families for over 15 years. He has dedicated his career to educating consumers about options for debt relief and has released 5 publications, including, "Get Out of Debt: Secrets Your Creditors Don't Want You to Know." You can request a free copy at http://www.castlelaw.net