Could we keep it?
June 9th, 2010 by Questions
My husband and I are thinking about filing for bankrupcy. We have 2 secured loans one for a car and one for a snowmobile. Our car is only worth about 3000 but we still owe approx 10000. Our snowmobile is worth approx 6000. We owe the loan approx 8000. Could we keep both of these if we maintain our payments?
Posted from: Nova Scotia
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June 10, 2010 at 8:48 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
A bankruptcy is really designed to impact your unsecured creditors. With secured creditors you can often retain the associated property (care and snowmobile), but to do so you have to continue to make the payments.
So the big question becomes can you afford these payments? You need to sit down and create a budget and see if there is sufficient room. When putting together this budget, be cautious, you don’t want to leave things to tight. Think of the bankruptcy as a one time opportunity to set your financial life in order and make sure your cash flow works. If you break the secured contracts before bankruptcy you can help to impact this cash flow for the positive, but if you end up defaulting on payments for these contracts after the filing of a bankruptcy, you will be responsible for the shortfall.