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What will happen to my secured debt if I file? My parents cosigned for a loan which is paid up to date. The original loan was for $90,000 (we have paid off about $45,000). This loan is paid by my husband and I and we have the capacity to continue to pay. I, myself also have a large amount of unsecured debt which is where I am having the problems. I had a second job which I was using to pay my unsecured personal debts (Approx. $40,000) but I just received notice that I may be laid off shortly from that job.

Posted from: British Columbia

Posted from: British Columbia

One Response to “Confused”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

This depends on a few things (i.e. who is the secured creditor in question, what type of asset do they have held as security, are you up to date with the payments etc.). Technically speaking as of today the secured creditor has the right to seize any secured assets simply because a bankruptcy is filed, this doesn’t mean they are going to elect to do this, simply that they have the right. The best way to determine if this is going to be an issue is to contact a local trustee as they will be more familiar with the creditor in questions local practice (as it often varies by area).

Now for reference, this technicality changes as of September 18, 2009 as they Bankruptcy and Insolvency Act is being amended and one of the amendments stipulates that a creditor cannot seize pledged property for reason that a bankruptcy has been filed, so they will ultimately have to wait for some sort of breech of contract in order for their seizure rights to kick in. So if you are really concerned they may elect to seize and therefore have an impact on your parents, you can wait until after September 18, 2009 to file.