In case of Minnesota bankruptcy a secured debt, the creditor has constitutional rights in the security (or collateral) along with the rights against the debtor. In Chapter 7, explains Minnesota bankruptcy lawyer, the debtor's own liabilities can be discharged whereas the lien rights in the collateral can go through bankruptcy unaltered except when they are evaded or exposed. The debtor can opt for a manner to provide for the creditor's rights in cases where the lien cannot be avoided in the collateral.
Long term secured debt for example mortgages go through the bankruptcy unaltered by the discharge. The majority creditors secured in real property are content in receiving continued payments on the debt, providing they are current. Chapter 13 can be used for curing defaults in long-term secured debts.
The preferences in dealing your secured debt in Minnesota bankruptcy incorporate –
• Redemption. You pay the current value of your asset (collateral) to the secured creditor for the debt in a single cash payment. Once you make the payment, the asset becomes yours and free of secured debt. The remaining debt is dealt as unsecured debt in the bankruptcy and is discharged along with your other debts.
• Reaffirmation. It is an agreement for waiving the discharge concerning the reaffirmed debt and paying the debt as per the terms of the original agreement. Reaffirmed debt is lawfully enforced upon violation (stop paying) later and allows the creditor to retain the security interest against the asset pending the payment of debt.
• Surrendering the collateral. Turns the debt into an unsecured debt in the bankruptcy and permits the creditor to sell the asset in order to reclaim at least some part of the claim. In cases where the asset may not be worth compared to what was owed on it, the due balance is discharged in the bankruptcy.
Minnesota bankruptcy lawyer, makes it clear that if the asset at present has lower value compared to the cost of repossessing it (e.g. used computers, major appliances, automobile tires) the debtor can merely refuse to redeem, reaffirm, or surrender and await for any action from the creditors side for recovering the collateral after the bankruptcy.
Long term secured debt for example mortgages go through the bankruptcy unaltered by the discharge. The majority creditors secured in real property are content in receiving continued payments on the debt, providing they are current. Chapter 13 can be used for curing defaults in long-term secured debts.
The preferences in dealing your secured debt in Minnesota bankruptcy incorporate –
• Redemption. You pay the current value of your asset (collateral) to the secured creditor for the debt in a single cash payment. Once you make the payment, the asset becomes yours and free of secured debt. The remaining debt is dealt as unsecured debt in the bankruptcy and is discharged along with your other debts.
• Reaffirmation. It is an agreement for waiving the discharge concerning the reaffirmed debt and paying the debt as per the terms of the original agreement. Reaffirmed debt is lawfully enforced upon violation (stop paying) later and allows the creditor to retain the security interest against the asset pending the payment of debt.
• Surrendering the collateral. Turns the debt into an unsecured debt in the bankruptcy and permits the creditor to sell the asset in order to reclaim at least some part of the claim. In cases where the asset may not be worth compared to what was owed on it, the due balance is discharged in the bankruptcy.
Minnesota bankruptcy lawyer, makes it clear that if the asset at present has lower value compared to the cost of repossessing it (e.g. used computers, major appliances, automobile tires) the debtor can merely refuse to redeem, reaffirm, or surrender and await for any action from the creditors side for recovering the collateral after the bankruptcy.
