Texas Mortgage Bankruptcy Attorney
Secured creditors, or those claiming an interest in particular property of the debtor, enjoy additional protection in bankruptcy. If their mortgage or security interest is properly documented, filed, and perfected at least 90 days before bankruptcy, they will be entitled to receive the value of the collateral securing their claim from the debtor, or the collateral itself. If your bankruptcy case is likely to involve mortgage (known in Texas as a deed of trust) or such secured debts as vehicle notes,contact a knowledgeable San Antonio bankruptcy attorney at Rosenbaum Law Offices (now Davis Law Firm).
If a foreclosure of your homestead or other important property is underway now, contact us immediately.
Your options decrease between the notice of foreclosure and the foreclosure sale, and as of the time of the sale, they disappear entirely.
In homestead deed of trust situations where the debtor has substantial equity in the house, the likely outcome will be that the debtor makes normal payments during the bankruptcy case and arranges to cure any arrearages over time. In a Chapter 13 case, any payments in default will be paid over three to five years in the Chapter 13 repayment plan. In a Chapter 7 case, the arrearages will need the acquiescence of the creditor to agree to a negotiated payment plan or even capitalized into the original deed of trust. Where the debtor has little or no equity in the house, the creditor can make a strong case for relief from the automatic stay so it can proceed with foreclosure. The creditor might well be better off, however, if it continues to accept payments from the debtor, if the debtor’s lack of equity reflects declining property values in that area.
Other tools that may be useful in resolving your bankruptcy are redemption and reaffirmation. Redemption is a tool for wiping out a lender’s lien when the actual value of, for example, your car, is less than the value of the loan that it secures. Redemption allows you to pay the creditor the actual value and keep the car without a lien. Reaffirmation is a tool that allows you to reaffirm a debt with a particular creditor. This can be useful when you want to keep something, like a car or your home, that secures a loan,
Other secured debts, such as obligations on auto loans, are more likely to involve a lack of equity in the debtor, and relief from the automatic stay is always a risk. Our Texas bankruptcy lawyers will make a careful review of the situation and take the steps necessary to protect your interests.
One factor that works in you favor is sheer market forces. If a secured creditor repossesses and liquidates the collateral for less than the value of the claim, the creditor only holds an unsecured claim for the difference. In most bankruptcy cases, that unsecured claim will be worth little or nothing, and will disappear upon discharge. We’ll advise you as to the alternatives that make best sense in your circumstances, and if you need to keep a particular motor vehicle or other property, we can usually arrange your case so as to accomplish that objective.
Once in a while our close attention to detail allows us to spot a secured debt or even a deed of trust that was not properly documented or perfected. That means the secured creditor might find itself suddenly unsecured, and without the ability to proceed against what would have been the collateral securing its claim.
Because of the value and importance of the assets typically involved, most bankruptcy debtors find secured debts and mortgage problems to be among the most worrisome. For more information about your options concerning property securing a creditor’s claim in bankruptcy, contact a San Antonio bankruptcy attorney at Rosenbaum Law Offices (now Davis Law Firm) for a confidential and free consultation.