How Bankruptcy Affects Different Types of Debt
Secured debt and unsecured debt are handled differently during the bankruptcy process. The way these types of debts are dealt with depends on the type of bankruptcy filed, Chapter 7 or Chapter 13. In fact, the type of debts you have will be a major factor in determining which type of bankruptcy you should file.
At Marrs & Terry, PLLC, our attorneys have helped thousands of people like you overcome overwhelming debt, both secured and unsecured, through bankruptcy. If you are ready to find out more about what we can do for you, contact us to schedule a consultation. Our services are available to individuals in Flint and the surrounding areas in Michigan.
What is Secured Debt and How is it Handled in Bankruptcy?
Secured debt is debt attached to assets that, if you default on the loan, can be taken away from you by the lender. Home mortgages, car loans and loans for major household appliances are all examples of secured debt.
Chapter 7 bankruptcy allows you to either reaffirm secured debts and keep the asset or allow the lender to take it away. Chapter 13 allows you to create a debt repayment plan that can reduce and extend monthly payments on secured debts.
What is Unsecured Debt and How is it Handled in Bankruptcy?
Generally, unsecured debt is debt attached to services or other things that cannot be taken away from you, such as credit card bills, medical bills and college loans. Child support and alimony are also examples of unsecured debt.
Chapter 7 bankruptcy allows most unsecured debts to be completely discharged. School loans, child support and alimony are among the few exceptions. Chapter 13 allows you to create a plan to repay unsecured debts, typically with 0% interest and few penalties.
Take Action Against Secured and Unsecured Debt
Is it time to take action to overcome secured or unsecured debt through bankruptcy? Discuss your situation with an experienced attorney to find out specifically how each of your debts can be addressed. Contact Marrs & Terry, PLLC online or call us toll free at 866-665-8095.
If you have been told you do not qualify for bankruptcy, do not give up. That might not actually be the end of the story. Get a second opinion from one of our experienced bankruptcy lawyers.
