Consult a Bankruptcy Attorney When Assistance Needed
Video Transcribed: Oklahoma Bankruptcy Attorney Edward Kelley here, answering your Oklahoma bankruptcy questions with oklahomacitybankruptcyattorney.pro. Today, we’re going to talk about secured debt. We talked about unsecured debt yesterday.
Tomorrow, we’ll talk about non-dischargeable debt, but for today, secured debt. As I said in my last video, pretty simple concept. Is there a piece of property securing your debt? Properly? Is the big question as well. If so, secure debt. Biggest common example, your car, also your home. Most people have a mortgage. A lot of people have a car payment.
If that’s the case, if it’s a purchase loan, which it generally is or what I see anyway, a lender gave you money to purchase that home or that vehicle and they take a complete security interest in the vehicle. So if you don’t pay it off, they can repossess the vehicle or they can foreclose on your home. Obviously, I have a lot more steps there.
As I mentioned a little bit in the last video, there are some secured debts that you can make into unsecured debts, which your bankruptcy attorney should do if at all possible. Second mortgages, loans that are not properly perfected meaning the right paperwork wasn’t done, your car’s collateral but there’s no lien recorded with the title, no lien recorded with the deed or it was used for something other than purchasing the home.
Your attorney will know these things so don’t just assume you’re out of luck because you signed some collateral. And just because you… A lot of these signature loans, personal loans, they’ll have you write down on your little contract, “I put my TV and my stereo.”
A lot of times it’s not specific as to what that is, and honestly, I haven’t seen too many of those people ever try to collect. However, rent-to-owns are always going to go after it. And those are usually properly perfected security interest in the furniture or the electronics or computer or wherever it is you’ve got. Aaron’s rent to own, for example.
Secured debts can be bifurcated, talked about that last time. If you bought your car, for example, less than 310 days prior to the filing of the bankruptcy, I’m sorry, more than 310 days prior to the filing of the bankruptcy, you can bifurcate your note into secured and unsecured portion.
As I said yesterday, let’s say you owe 10,000, car’s worth 5000, you can split off that 5000 additional that you owe, that you’re underwater, and only owe 5000, the interest of the collateral. Or, if you redeem it meaning paying it off in a bankruptcy, same deal.
A lot of times the security interest, if it’s not already, can be reduced to the actual value of the collateral in the bankruptcy and the rest can become unsecured. If you’ve got farm equipment, I won’t go too into that, that’s special case. There’s UCC financing statements. Again, your attorney will know whether a security interest has been perfected.
If it has not, it may remain unsecured. Secured debts in bankruptcy are typically the ones reaffirmed. I’ve done a video before on whether or whether not you should reaffirm your home. You know, generally not. I’ll talk about that again sometime.
So you can be totally current on your car, but if you don’t reaffirm it meaning resign it and take it out of the bankruptcy so the debt’s not discharged and you’re stuck with it, if you don’t do that, they can take the property whether you’re behind or not.
Some will, some won’t. They’re doing it a lot more so don’t ever just leave that to chance. Used to be kind of the way it worked, but not anymore. Stay on your attorney about those reaffirmations.