How Are Different Kinds Of Debt Treated In Bankruptcy?
The debts that you have are treated differently depending on the type of bankruptcy that you file and the type of debts that are involved. At the Greenbelt, Maryland, office of Vail A. Kaufman, P.A., we strive to help clients understand all of the aspects of their bankruptcy case. With more than 25 years of experience, we are confident in our pursuit of a new financial start for our clients.
Get your questions about secured and unsecured debt in bankruptcy answered during a free consultation with a lawyer at our firm. Call us today at 301-513-0500.
Secured Debt
A secured debt is one that is owed to a creditor that has an interest in a particular piece of property. If you don't pay they get the property. Mortgages and car loans are types of secured debt, as homes can be foreclosed upon and cars can be repossessed when the loan is in default. These are consensual, as you have agreed to the terms of the loan.
Taxes can be a form of secured debt, but they are considered nonconsensual as property is not put up as collateral. If taxes are not paid, a lien may be put against your property and cannot be removed until the taxes are repaid.
In Chapter 7, you may then have the right to take the property if the debt is not paid. Many people simply continue to pay the house note or car note and keep the property. Some tax debt may be discharged and some may not be discharged. It is best to talk to a lawyer to understand your options.
Unsecured Debt
The majority of the debt that people have is unsecured. This type of debt includes most credit card debt, medical bills, rent payments, utility bills, old repossessions and other bills. Unsecured debt can be discharged in Chapter 7 or reorganized and repaid all or only part in Chapter 13.
Learn More From Our Knowledgeable Attorney
We can help you understand how bankruptcy may help you deal with secured and unsecured debts you are facing. To discuss your specific situation during a free initial consultation, contact us today by calling 301-513-0500.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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