A Bankruptcy and Debt Relief Lawyer and Attorney Andy Miofsky

2249 Pontoon Road, Granite City Illinois 62040

An Illinois Bankruptcy Lawyer and Attorney 618-931-1313 Offering Chapter 7 and Chapter 13 Bankruptcy Attorney information in Madison, St Clair & Southern Illinois counties

Property that has been pledged to guarantee payment of a debt serves as collateral for a loan.  Typical examples are houses with mortgages, and cars with title loans, and household goods pledged to obtain a loan.  If the debtor fails to pay the debt, the lender can execute its rights to foreclose or repossess the collateral to sell and apply the proceeds to the balance of the debt.

When property serves as collateral, the loan is secured and a lien exists against the property.  Sometimes it is possible to have more than one lien on property.  For example, a first mortgage is superior or senior to a second or third mortgage.  Usually, the first in time stands as  the first in line for payment.  A properly recorded and perfected lien remains attached to property until the underlying loan is satisfied.

A claim with a lien is classified as a secured claim in bankruptcy and is treated differently than other unsecured claims.  Bankruptcy sometimes modifies the status of liens if the property is valued less than the amount owed.  There are special rules in bankruptcy that apply to claims secured by real estate, cars and other property.  Each category is treated differently.  An experienced bankruptcy lawyer can evaluate your case and explain your options.
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