Keep And Pay
Categories: Company Management
Falling on hard financial times, well, sucks...especially if times are so hard that we end up having to file for bankruptcy. Unfortunately, though, it happens, which is why it’s nice that things like keep and pay agreements exist. They can allow us to hold onto an asset—like our house, for example—and make payments on it even though we’ve filed for bankruptcy and are otherwise in a state of financial ruin.
When a bank takes something like our house away, not only is it disastrous for us and our family, but it’s also a huge pain for the bank. They have to seize it, appraise it, clean it up, sell it, and hope they recoup some money on it. If there’s a chance they could avoid all the hassle, still collect some money from us, and also avoid throwing us out on the street, then they might be amenable to doing that. And if they are, we could find ourselves the happy beneficiaries of a keep and pay agreement.
But keep and pay agreements aren’t a guaranteed thing, so anyone out there looking to file bankruptcy should take heed: we can request a keep and pay-type scenario with certain assets (houses and cars are the most popular) when we file for bankruptcy, but the bank doesn’t have to agree. If they feel that our financial sitch is so dire that we won’t be able to make payments, they can tell us to get lost and seize those assets anyway. But regardless of that fact, it’s still an option worth investigating.
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