If you are currently facing a financial crisis where you have been laid off from work, making it difficult for you to make your payments, you may find yourself in a situation where a bankruptcy may be your only way out.
Bankruptcy laws can differ in each state, and if you happen to be in Kansas City, you might wonder what will happen to your car, or your home, once you file bankruptcy. The following information will discuss the different options that you have when filing bankruptcy, and what will ultimately happen to your home and car once the process is complete.
What Is a Bankruptcy?
Bankruptcy is simply a legal proceeding, one that often occurs when a person is unable to keep up with their monthly payments. It is used to give people a fresh financial start, and everyone can file for bankruptcy, but it depends on your situation and what you intend to do. It is available for everyone by federal law, and all bankruptcy cases are handled by federal courts. It is always better to work with a Kansas City bankruptcy attorney that will understand what needs to be done so that you can get through this process as quickly as possible.
Why a Bankruptcy Will Help You
Most people are focused upon the negative aspect of a bankruptcy, with the worst being a huge red flag on your credit rating. This can last for several years and will make it virtually impossible for you to obtain any type of credit, but there are positive reasons to do this as well.
For example, if you have bill collectors calling you every single day, this is going to stop because your lawyer will send them letters telling them too. If you are facing a situation where you cannot make the payment on your home or car, this will prevent foreclosures from occurring and also the repossession of your vehicle. In fact, if your car has been repossessed, the bankruptcy court will force them to return the vehicle to you, which is one of the benefits of filing for a bankruptcy. This answers the question as to what will happen to your home and car, clearly showing that this is one way to prevent the loss of everything.
What a Bankruptcy Cannot Do For You
Although losing your house to foreclosure will not occur, and your car will not be repossessed, this does not eliminate these debts by any means. You will have to find a way to make your payments, and by eliminating all of your other debts, this fresh start that you have been getting will allow you to redirect all of your existing finances to making the payments on your home and vehicle. If it were possible to pay off a mortgage and a car loan with a bankruptcy, this would be done every hour of every single day by people that own homes and cars. It’s simply a way to provide you with the opportunity to catch up on your payments, something that will be much easier with all of your other debts, the ones that can be eliminated, removed from the debts that you owe.
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Once you have gone through a bankruptcy, you will realize that it is actually a very good decision to make despite the fact that it does affect your credit rating. If you are in a situation that you cannot recover from, it’s definitely time to file the paperwork, or at the very least, talk to a Kansas City bankruptcy attorney that can help you through every step of the process, starting with a free consultation!