question
August 1st, 2013 by Questions
If your asset is secured (ie. a car) but it is not considered “exempt property” can it be seized?
Posted from: Prince Edward Island
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August 01, 2013 at 8:50 pm, A licensed trustee said:
maybe – it depends on how much net value or equity you’ve built up in the asset. For example, if you own a home it may be security to a mortgage. As long as you keep the mortgage current the secured creditor (the mortgage company) can’t call you loan, but if you have equity in the house you may be required to pay an amount equal to your equity into your bankruptcy. If you are unable to do so then the house may be seized and sold to get at that money.
The same rules apply to cars, bots, trailers, and other assets, but these things are far less likely to have nay net worth beyond what you owe on them.
Make sure you discuss your concerns with your trustee BEFORE you file – far better to have a plan in place before you become bankruptcy then to find out after you filed that you need to come up with a bucket of money or you’ll lose your house…