The Short Answer
Yes — you must list every asset and every creditor in your bankruptcy petition, no exceptions. Being current on your mortgage or car loan does not mean you can leave those debts or assets off your filing. What changes based on your situation is not whether property is included, but how it gets handled: whether you pay a secured debt directly or through your Chapter 13 plan payment depends on the type of debt and whether you're current on it.
When clients visit our office, one of the most common questions we receive is: “Does my house or car have to be included in my bankruptcy?” There are two ways this phrase may be interpreted. If the question is meant: “Do I have to list my house or car as an asset in my bankruptcy?” – the answer is yes. If the question is: “Do I have to make my mortgage payment or car payment through my Chapter 13 Plan payment?” – the answer is maybe. Let’s delve into those answers a bit more.
Many people who are interested in filing bankruptcy have remained current on their mortgage and/or car payments. Therefore, there is a common misconception that if you are current on an asset’s payment, or if the asset is paid for, you will not need to disclose information about these assets or debts. This is incorrect.
The United States Bankruptcy Code requires that everyone filing bankruptcy list down all of his or her assets as well as all of his or her creditors. For example, assume Jim Waters owns a house that is worth $150,000.00 and has the remaining mortgage balance of $130,000.00 through ABC Mortgage. Jim is current on his mortgage and wants to file a Chapter 7 bankruptcy. To do this, Jim will still need to list his home as an asset in his bankruptcy petition. Jim will also need to list ABC Mortgage as a secured creditor in his bankruptcy petition and provide the total amount left to pay on his mortgage. While Jim’s mortgage company will get notice of his bankruptcy filing, Jim will continue to pay his regular mortgage payment directly each month. Therefore, Jim’s home is included in the bankruptcy as an asset, but Jim’s bankruptcy does not affect the way Jim’s home mortgage is paid due to his bankruptcy.
The same is true for motor vehicles. If you are current on your car or if you own your car outright, you must provide information related to the car to include in your bankruptcy petition.
If you have a mortgage payment and are filing Chapter 13 bankruptcy, you may wonder if your Chapter 13 Plan payment will include your mortgage payment. Some clients prefer that their mortgage payment be included the Chapter 13 Plan payment, so that they can make one simple and easy payment for all of their debts each month. Other clients prefer to continue making their mortgage payments on their own. But there are is one factor that will determine whether your mortgage payment will remain outside your Plan payment or whether it will be included in the Plan.
The question is: Are you current on your mortgage?
If the answer to this question is no, you will not be able to keep your mortgage payment outside of the Chapter 13 Plan payment. It will instead be a part of this monthly payment you make to the Chapter 13 Office and will be disbursed out by the Chapter 13 Trustee. If the answer to this question is yes, you may continue to make your monthly mortgage payment directly, outside of the Chapter 13 Plan, as long as you were current on the date of the filing of your bankruptcy.
Car payments in a Chapter 13 bankruptcy are a bit different. Whether you are current on your car loan does not matter in this instance. Instead, car payments are automatically included in a Chapter 13 bankruptcy Plan payment. You will likely not make your full monthly car payment through the Plan. Instead, your full remaining balance will be stretched out over a span of approximately 60 months. While this normally reduces the monthly car payment paid in each month, your car will still be paid off by the end of your Chapter 13 bankruptcy and will not accrue late fees or additional penalties, regardless of when the original car loan was to be satisfied. If your car loan was set to be paid off for a term longer than 60 months, your regular car payment will be made through your Chapter 13 Plan payment.
Key Takeaways
- Every asset you own — home, car, savings, personal property — must be disclosed in your bankruptcy petition, regardless of whether it's paid off or current.
- Every creditor you owe must be listed, including mortgage lenders and auto lenders you intend to keep paying.
- In Chapter 7, if you're current on your mortgage or car loan, you generally continue making those payments directly and the bankruptcy doesn't change that routine.
- In Chapter 13, mortgage payments can stay outside your plan payment only if you were current on your mortgage as of your filing date — if you're behind, the arrearage must run through the plan.
- Car loan payments in Chapter 13 are handled differently from mortgages: they are typically included in your plan payment and stretched across the plan term, often reducing your monthly payment amount.
- Omitting an asset or creditor — even unintentionally — can create serious legal problems, which is why full disclosure from day one is essential.
Attorney Insight
The mistake I see most often is people coming in having already decided what to include — usually their "problem" debts — and leaving out the house or car because they're current and want to keep them. That's not how it works, and filing an incomplete petition can expose you to dismissal or worse. What people confuse is the difference between listing an asset and losing it: in most cases, North Carolina's exemptions protect your home equity up to $35,000 (or $70,000 for a married couple) and your vehicle up to $3,500, so you keep the property — you just have to be honest about owning it. Full disclosure isn't a threat to your case; it's what makes your case work.
