What happens to secured debts in a Chapter 7 Bankruptcy?

In Idaho, secured debts are debts in which the debtor has a lien on a piece of property that can be taken in case of non-payment. In a Chapter 7 Bankruptcy filing, debtors can choose to either reaffirm, redeem, or surrender these secured debts. Reaffirmation is when the debtor agrees to remain liable for the debt and continue to make payments. The lien on the property remains in place, and the creditor may repossess the property if payments are not made. Redemption allows the debtor to keep the property by paying the creditor the amount they would get if they sold the property at a public auction. Surrender gives the creditor permission to seize the property and use the proceeds to pay off the debt. It is important for debtors to be aware of the options they have with their secured debts in a Chapter 7 Bankruptcy and to seek advice from legal counsel or bankruptcy court if they are uncertain about what to do. Bankruptcy is a serious matter and the consequences of making the wrong decision can be costly or irreversible.

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What happens to secured debts in a Chapter 7 Bankruptcy?

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