If you are financing a car or home, and you want to keep it, and keep making payments on it, that usually is never a problem and it may help your future credit rating. You do want to be "current on your payments" when we file.

    Your lender does have a right to know about your bankruptcy, but they usually always will accept your money. Some of the Lenders will require that you sign a "reaffirmation" which will make both the debt and the lien "survive" the bankruptcy. Some lenders will not, and be satisfied with your continuing payments along with only their recorded liens or mortgage.

    You can almost always jump out of your reaffirmation so long as your case is still open or 60-days after it is filed with the Court. So, even if you sign, and the motor blows up, or you just change your mind, this is an option.

    Generally speaking, a Chapter 7 Bankruptcy is the most common because it is a complete fresh start and liquidation of all of your non-exempt assets resulting in zero debt.  You do not have to file a Chapter 13 Bankruptcy to keep your car or your real estate if they are "upside down," i.e., you owe more than they are worth or if your equity is less than $4,000 for your car or $145,425 for your house.  However, you usually must be current on your mortgage payments to do this.

    Try to do a work-around with your mortgage company if you are behind on your mortgage payments so you are not forced into a Chapter 13.

    Generally speaking, a Chapter 13 Bankruptcy is either for the very wealthy, or for the modest person who has fallen behind on their mortgage.  You never want to do a Chapter 13 to save a car or pay an attorney bankruptcy fees.  Because a Chapter 13 is akin to a "super garnishment" the investment you are trying to protect must make sense and be a good and wise investment.  If your mortgage is at a high rate or adjustable, you should probably just forget about it, and walk away from it.  A Chapter 13 Bankruptcy, in exchange for the discharge of your debts, will go over your food, clothing, etc., monthly budget with a fine-tooth comb, and then take all of your discretionary income for 3 to 5 years.

    Most people are not OK with that or they are legally stopped from filing a Chapter 7 and have no choice.

    Lastly, if you must or should file a Chapter 13, there are at least two powerful benefits that may justify or partly justify its use and expense. The first is restructuring student loan payments or fines, penalties, or restitution payments to a 3 or 5 year plan. These will be almost certainly at 100% so the benefit is limited.

    In a Chapter 13, you may be able to do a strip-down on an over-financed car down to bluebook value. The stripdown payments will equal bluebook value and be either approximately 3 years in a 3-year Plan, or 5 years in a 5-year Plan.

    In a Chapter 7, if you are approved by a refinance company, you may also strip-off any excess loan amount above blue book value and emerge with a new loan at blue book value plus costs and interest. This is called a Redemption.

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