A Chapter 7 bankruptcy is a great option if you are looking to get out from under the weight of significant debt. Through this process, many of your debts will be effectively discharged and you will have a “fresh start”.
However, it’s important to note that different rules apply to debts that are “secured”. Here, while the underlying debt may be canceled, the creditor is often entitled to take back the property that was involved in the transaction (referred to as collateral).
If you are in this situation, you do have a few options. You may relinquish the property to the creditor, redeem the property, reaffirm the underlying debt, or retain the collateral and pay the money you owe.