Secured vs Unsecured Debts in Bankruptcy
The process of completing a bankruptcy can often be difficult and complicated. If you’re going to be proceeding through the process alone, it may often feel intimidating. Understanding the basics of your debts and how they can be managed throughout the bankruptcy process is often best handled with an ally like a bankruptcy lawyer. By working with a qualified attorney or bankruptcy lawyer, you could find out just how you should be filing for your debts and how to manage a bankruptcy.
The types of bankruptcies managed by bankruptcy lawyers:
A quality bankruptcy lawyer can handle the challenge of working with your attorney. There are usually two types of bankruptcy debtors available and it’s important to choose the best option for your needs.
Chapter 7 Bankruptcy: this type of bankruptcy is considered to be a complete liquidation and most of your debts will be discharged at the end of this process. Trustees can oversee the process of Chapter 7 bankruptcy in which most of your debts will be resolved. Individuals that do not qualify for this type of bankruptcy may want to consider Chapter 13.
Chapter 13 Bankruptcy: Chapter 13 involves the debtor paying back the vast majority of their debts with some forgiveness. Repayment plans detail how the debts will be repaid and they usually resolve within 3 to 5 years.
Secured Debts in Bankruptcy
Secured debts often have the ability to be reclaimed by a creditor if the debtor is unable to make payments on a secured loan. Secured debts could be car loans or mortgages in which the car or the home could be repossessed as a security feature of that loan.
Unsecured Debts in Bankruptcy
If you’re not able to pay off unsecured debts it could be possible for the creditor to see some of your assets or property before you go through the process of court. This might mean unsecured debts like credit cards, student loans, phone companies, utilities, medical expenses, rent and more.
Although bankruptcy can be quite a challenging process managing secured debts and unsecured debts requires finding an attorney with the appropriate amount of experience and being able to manage bankruptcy proceedings in an ideal format. Contact us today to learn more about how to manage your debt and bankruptcy options that could be available to you.