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One of the most common questions I get is: Do I have to list my mortgage or car loan in my bankruptcy if I want to keep my house and my car?

The short answer:  Yes.  ALL debts must be listed in your bankruptcy, even debts for things you want to keep like cars or houses, even debts that are not dischargeable like student loans, even debts you migtht want to voluntarily pay back after your bankruptcy like a loan to a family member or friend.  Everything must get listed.

So what does that mean for your car or mortgage?

First, let's talk about what happens to those loans in bankruptcy. 

Personal Liability:  Your personal liability is discharged in the bankruptcy for these loans, but don't get too excited.  If you want to keep the car or house you have to continue to make voluntary payments.  But if you decided at a later date to walk away from the car or house, you could, and the bank would not be able to come after you for the "deficiency" - the difference between what you owed and what the collateral (car or house) was sold for.  One of the down sides of this is that the bank will no longer report your on time payments to the credit bureaus.  This is because they cannot report your late payments since you are technically making a voluntary payment so they can't penalize you for not paying a debt you really aren't required to pay.

**  If you sign a reaffirmation agreement, you are STILL personally liable for a debt.  See our page about Reaffirmation Agreements for more information.

Lien:  The lien remains on the collateral so if you stop making voluntary payments, the car or house can be taken by repo or foreclosure etc.

Changes to how you pay these  loans:  When you file bankruptcy, many secured creditors won't let you pay online anymore, won't automatically deduct a payment from y our bank account anymore, and may require you to mail your check to a different address.  These creditors sometimes won't talk to you on the phone and they won't send you statements either.  This can be very frustrating because you still have to pay these debts if you want to keep the house or car.  If the lender isn't talking to you and giving you the information you need to pay the loan  please make sure you contact me.  Don't forget to give me your full account number.  I can send a release to allow the lender to talk to you directly.