Surrendering property during a bankruptcy

Property that you give up in a bankruptcy proceeding will have a lot to do with what your exemptions are and whether or not you’re current on your payments. Oftentimes, your lawyer will work out a strategy with you by which you choose to get rid of some property. An example might be an automobile payment that’s extremely high that you’re not able to afford, or a house in which you may or may not have any equity, and yet maybe an adjustable-rate mortgage is taking that payment every month up above what your family budget is comfortable with. A strategy is important in determining what I’m going to keep, what I’m going to pay for, and what I’m potentially going to surrender in the course of the bankruptcy. Another important issue is, if I let something go back outside of bankruptcy, I’m likely to be hit with what’s called a deficiency. That is, they sold my car on which I owed $15,000, they sold it for $10,000, they send a bill to me for $5,000. That’s a deficiency. If I surrender that in the bankruptcy, they get that automobile, but they cannot send me, then, a notice for a deficiency; that deficiency amount is discharged in the bankruptcy.