Can I file bankruptcy after missing payments?
Generally speaking, if you have not made a car or house payment in over three months, the lien holder (lender) will initiate the repossession or foreclose process. In a secured arrangement, the lien holder can take the property back whenever you break the terms of your agreement.
If you take shelter under a Chapter 13 bankruptcy, the lien holder of either your home or your car cannot take action to take the property back. Their efforts to repossess the property are temporarily suspended. Under a Chapter 13 bankruptcy, your income and assets are reviewed and a reasonable payment plan is typically created so that you continue making payments. When you proceed with this type of bankruptcy, you are often able to keep secured property such as a home or car.
This is not always true under a Chapter 7 bankruptcy. Under Chapter 7, your debts are typically wiped out. You can "affirm" a car or home loan, but this will not stop foreclosure or repossession unless you make other arrangements with the lien holder.
