Tag Archives: HomeLoan

Should I Reaffirm a Home Loan?

In many bankruptcy cases it is possible to completely save your home either by exemption or reaffirmation. Obviously, exemption is the more preferable route since it leaves you with little or no repayment responsibility down the line. As common as it is to exempt your home in Chapter 7 bankruptcy, it is not always possible. In those cases, you may have to choose between reaffirming a home loan or giving the house up. Home Loans and Secured Debt In bankruptcy, home loans are classified as secured debt, which carries a personal liability as well as a collateral. This means that you have a liability to repay the loan, otherwise the creditor may take back the collateral. Obviously, the collateral in a home loan is usually the house itself. When the creditor takes the house back, it’s called foreclosure. Your personal liability to repay the debt is usually discharged after filing…
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