Can keep you can keep your car and house in Chapter 7?

Can You Keep Your House and Car in Bankruptcy?

YES — in both Chapter 7 and Chapter 13, most people keep:

• their house

• their car

• their personal property

The rules are different depending on the chapter, but the outcome is usually the same:

You keep what matters most.

Let’s break it down.

Chapter 7 is a fresh start bankruptcy.

People worry they will lose everything — but that’s not how it works.

✔ Most people keep their house

✔ Most people keep their car

✔ Most people keep all their property

You keep secured property in Chapter 7 by using something called a:

Reaffirmation Agreement

A reaffirmation agreement means:

• you stay bound to the original loan

• you keep making payments

• you choose NOT to discharge that specific debt

If you’re current on payments and your equity is within Michigan’s exemption limits, you can keep the property.

To reaffirm:

• House: You can protect up to $28,000 in equity if single

• Car: Usually not a problem — Michigan exemptions are generous

You must also:

• be current on payments

• have insurance

• disclose ALL debts (even ones you want to keep)

✔ If you want to keep the property, make your payments on time.

Chapter 13 is a reorganization bankruptcy.

It is the BEST chapter for protecting property.

✔ Chapter 13 stops foreclosure

✔ Chapter 13 stops repossession

✔ Chapter 13 lets you catch up on missed payments

✔ Chapter 13 can reduce what you owe on certain debts

✔ Chapter 13 can eliminate a second mortgage (lien strip)

If you’re behind on your house or car, Chapter 13 is often the only way to keep them.

Chapter 13 allows you to:

• stop foreclosure immediately

• catch up on missed mortgage payments over 3–5 years

• keep your home even if you’re behind

If your home is underwater, you may even qualify for:

Lien Stripping

This can wipe out a second mortgage or HELOC if the first mortgage is higher than the value of the home.

This is common in:

• Howell

• Brighton

• White Lake

• Hartland

• Waterford

Chapter 13 can:

• stop repossession

• force the lender to return a repossessed car (if done quickly)

• reduce the interest rate

• sometimes reduce the balance owed (cramdown)

If you’re behind on car payments, Chapter 13 is often the best solution.

Choose Chapter 7 if:

• you’re current on your house and car

• your equity is within exemption limits

• you want a fast fresh start

• you want to reaffirm and keep the property

Choose Chapter 13 if:

• you’re behind on payments

• you’re facing foreclosure

• you’re facing repossession

• you have too much equity

• you want to strip a second mortgage

• you need time to catch up

If you’re not sure which chapter protects you best, call me. I’ll tell you in 5 minutes.

248-882-0838

Reaffirming is not always the best choice.

❌ You’re locked into the loan

❌ You must keep paying

❌ You can’t discharge it later

❌ Mortgage payments may not show as good credit

Sometimes it’s smarter to:

• reaffirm the car

• NOT reaffirm the mortgage

• or file Chapter 13 instead

I’ll tell you what’s best for your situation.

248‑882‑0838

Call, text, or email: dddern@aol.com

I’ll explain:

• whether you should reaffirm

• whether you should NOT reaffirm

• whether Chapter 7 or Chapter 13 protects you better

• how to keep your house and car safely

Consultations are always free at the Law Office of Doug Dern.

I’m a debt relief agency. I help people file for bankruptcy under the United States Bankruptcy Code.

If you live in:

• Brighton

• Howell

• Hartland

• White Lake

• Waterford

• Fenton

• Milford

…you can keep your house and car in both Chapter 7 and Chapter 13 — and I’ll show you how.