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Adding a secured debt during bankruptcy

If I go bankrupt (will be my 2nd time) and after i have been in bankruptcy for awhile find I cannot afford my car payment or mortgage (which is exempt as there is zero equity in fact I owe more than it is worth currently) can I then default and add that debt (and the difference that will be owed to the car company as I also owe more than it is worth) to my bankruptcy or do I need to do it at the time I sign or can it be any time before I am discharged from bankruptcy as long as the debt existed before I declared bankruptcy…
thank you

Posted from: Alberta

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One Response to “Adding a secured debt during bankruptcy”

Desmond West-Chow, CIRP said...

In order for the secured debts to be a part of a bankruptcy, the default must occur before the date of bankruptcy (the day you sign documents). The default occurs when there is indication to the creditor that the debt will no longer be paid by either notifying the creditors of voluntary repossession or simply no longer paying the loans. If there are payments made after the date of filing, the loans would generally be considered an after-bankruptcy debt, if default were to take place, and as such would not be a debt discharged by bankruptcy and your responsibility to pay in full. Something that may be worthwhile to consider would be a consumer proposal. As this would your second bankruptcy, the effect on your credit would certainly be less severe in addition to monthly payments that are quite often lower and more manageable than the required monthly payments into a bankruptcy estate (meaning managing your monthly loan payments may also be easier). If you would like more information, please don’t hesitate to contact our office.