secured debt in bankruptcy Archives - Peoria Bankruptcy Lawyer Charles Covey

How is Property Subject to a Lien Handled Under Bankruptcy?

February 28, 2022

Those considering bankruptcy protection often wonder what happens to property that is subject to a lien. In some cases, a bankruptcy court may set aside or reduce the lien on the property, allowing more flexibility in bankruptcy process. If individuals (or spouse's filing jointly) wish to keep the property secured by a lien, they can also agree to a reaffirmation plan with secured creditors. A reaffirmation agreement is a promise to continue to pay the amount owed despite the bankruptcy, … [Read more...]

HELOC and Bankruptcy Protection

May 4, 2021

Bankruptcy debt can be secured or unsecured, each subject to different treatment under the Bankruptcy Code. Debt that is secured with collateral of the ‘right to setoff’ or a ‘lien on property’ ensures the repayment of the obligation if a borrower declares bankruptcy. Can an automatic stay protect a home used as collateral for a loan? Many who are considering bankruptcy want to know if they can protect property used as collateral, such as their home (think HELOC) or automobile. Although a … [Read more...]

Individual and Business Bankruptcy Resulting from Covid-19

April 23, 2020

Many predict that the widespread shutdowns related to Covid-19 will result in a record number of bankruptcy filings, both personal and business. Despite the Paycheck Protection Program (PPP) for small businesses and stimulus checks sent to individuals and families across the nation, many families and businesses are accumulating massive debt with limited resources flowing in. Over the next 12 months both personal and business bankruptcies may see a dramatic increase depending on how long the … [Read more...]

Should I Take an HELOC to Pay for Repairs to My Home?

March 26, 2019

Although many Americans look to home equity lines of credit to finance a needed repair such as a new roof or tackle other expenses, it is important to see an HELOC for what it is - a second mortgage resulting in a lien against your home. A home equity line of credit is a home's market value minus any outstanding loan balance giving homeowners access to cash using their home as collateral. Of course, when homeowners take out an HELOC, they increase the risk of losing their home if they are … [Read more...]

Drawbacks of Taking Out a Home Equity Line of Credit

December 19, 2018

With many Americans shouldering more debt and wages stagnating, home equity is being used as a lifeline to make ends meet. In fact, a recent survey reveals that 1 in 3 homeowners earning less than $30,000 a year and 22 percent of millennials agreed that tapping into home equity is okay to cover their everyday bills. Because many Americans have little savings, home equity often is also used to cover gaps when costly home maintenance is needed or when funds run short for other unexpected … [Read more...]

What is Secured Debt in Bankruptcy?

February 16, 2016

A debt is considered secure when it is tied to a specific item of property, called collateral, that guarantees the payment of the debt. Common examples of secured debts are car loans and mortgages, where the house or automobile serve as collateral for the debt. Secured debts may also include home equity loans or HELOC's, loans for a range of vehicles beyond cars from boats or tractors to RVs, loans for business equipment, machines or inventory and even store charges made with a credit card that … [Read more...]