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Posted on in Secured Debts

Creditors with secured debts often have much more leverage against you than with unsecured debts.

The last couple months we have been discussing your bankruptcy options with debts secured by your vehicle, by your home, and by investment or business real estate. You can have debts secured by many other kinds of security—furniture and appliances, other personal property you buy or else had owned beforehand, business equipment and inventory, personal possessions that are subject to an income tax or judgment lien. These are just some of the possibilities. Before we get into these, and how bankruptcy handles them, let’s get a better understanding of secured debts in general.

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Bankruptcy cannot remove contractor’s liens or other statutory liens from your home, but both Chapter 7 and 13 can help you deal with them.

A bankruptcy “discharge” legally and permanently wipes out your personal liability for most debts.

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Bankruptcy can’t get rid of most creditor liens on what you own. But judgment liens on your home are an exception.

Our last blog post was about judgment liens, why they are so dangerous, and how both Chapter 7 and 13 types of bankruptcy can deal with them. Today’s blog post explains what determines whether a particular judgment lien can be removed, or “avoided,” and how that’s done.

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After covering Chapter 7 last time, now how does Chapter 13 help you keep (or surrender) collateral on a debt?

Last time we explained the crucial difference between secured and unsecured debts, and focused particularly on “purchase money” secured debts. That led to laying out the advantages Chapter 7 “straight bankruptcy” gives you when dealing with something you bought that is now collateral on the debt you owe.

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How does bankruptcy treat something you bought—furniture, an appliance, or some electronics—when that thing is collateral on a debt?

In our last couple blog posts we compared how Chapter 7 “straight bankruptcy” and Chapter 13 “adjustment of debts” each deal with vehicles that are collateral on vehicle loans. Today let’s look at other personal property that you buy on credit where the creditor has the right to repossess the stuff if you don’t pay the debt.

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