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Question: I'VE BEEN TOLD THAT MY AUTO AND HOUSE ARE EXEMPT FROM BANKRUPTCY. WHAT I DON'T UNDERSTAND IS AFTER CHAPTER 7 IS FILED DO I CONTINUE TO PAY MORTGAGE AND AUTO LOAN OR ARE THEY WIPED OFF?
Response: Your mortgage and auto loan are secured loans. That is, they are secured by your house and your car. Even if your personal liability on the Notes is wiped out as result of your bankruptcy filing, you must continue to make payments on the mortgage and the car loan if you want to keep them. Otherwise, the lenders have a right to foreclose on the property or repossess the vehicle because they are collateral for the loans. If you do not want to keep the house or the car, then you can stop making payments on them and if the lender forecloses on the property or repossesses the car, you would owe nothing more. The lender cannot come after you for the deficiency after the foreclosure sale of the home or re-sale of the repossessed vehicle because your personal obligation on the Notes have been wiped out by your bankruptcy.