Q: is collateral protected on a loan when filing bankruptcy
A:
There are not enough facts to know what you are asking. Some examples are:
If a chapter 13 bankruptcy is filed and the value of the collateral plus the interest rate required by the bankruptcy court is paid and insurance is maintained on the collateral, then you can keep that collateral provided you pay your plan payments and continue to maintain the insurance.
If the loan is a purchase money loan and the loan was made less than 2.5 years ago on auto loans, less than 1 year ago on other personal property loans, then the above answer would be changed to reflect the the full payoff balance of the loan plus interest plus maintenance of insurance on the collateral would have to be done to retain the collateral.
If a chapter 7 or chapter 13 is filed and you do not plan to reaffirm the debt in the chapter 13 or propose to pay the loan under the rules stated above, then the creditor will normally ask the court to lift the automatic stay so the creditor can repossess the collateral.
If you are considering filing a bankruptcy, then you need to take the time to meet with an experienced bankruptcy attorney that handles chapter 7 and chapter 13 cases. Most attorneys will meet with you at no charge for the initial appointment. You can use the Justia "Find a Lawyer" link at the top of this page to search for an attorney.
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