One of the unique things about seeking financial help through bankruptcy is that it can help eliminate a wide range of debt types. From simple credit card bills, to payday loans and some tax debts, filing for bankruptcy offers debtors an simple plan to get back on track and out from under unmanageable burdens. The first thing to know when seeking bankruptcy protection is what types of debt you carry and how they may be managed in court.
Secured vs. Unsecured
Debts fall into one of two categories: secured or unsecured. Unsecured debts are those that are free of any right to repossess. As the most commonly held type of debt in bankruptcy unsecured accounts range from credit cards and personal loans, to domestic support payments, medical or student loans. However, just because these accounts are all considered unsecured does not mean they are handled the same in court. For example, you may find that your credit card bills are discharged, but you are not likely to have your back-due domestic support payments or delinquent student loans erased. This is because some accounts are considered "priority debts" and are generally considered the most important in terms of repayment.
In a Chapter 7 filing, you would likely find that credit cards, medical bills, and personal loans are eliminated through a discharge. However, back due domestic support payments, back taxes and student loans are typically going to require some form of payment or asset liquidation as debt satisfaction. In a Chapter 13 case, all of your priority and secured accounts will be rolled into a repayment plan. A portion of your unsecured accounts may also be included in the plan, but how much is determined based on a formulation of your disposable income.
Secured debts are those that are tied to collateral. Mortgages, car loans, home equity and title loans are examples of secured debts. They are called "secured" because the lender maintains the right to repossess and liquidate the named asset in the event you default on the loan. These lines of credit can be handled through the bankruptcy process, but you will still be responsible for resuming payment if you wish to keep the property. What the bankruptcy process can do for your secured accounts is remove penalty fees, strip away second liens on the asset and lower the interest rate or payment amount in order to make resuming the payments more affordable.
The Lee Law Firm is a Texas bankruptcy firm that aims to provide local residents with high quality legal representation at affordable rates. Their attorneys are professional and compassionate, giving clients the personalized attention they deserve. When filing bankruptcy, the Lee Law Firm is the right choice to help in the face of financial hardship.
Article Source: http://EzineArticles.com/?expert=Christopher_M
Article Source: http://EzineArticles.com/7952675
Secured vs. Unsecured
Debts fall into one of two categories: secured or unsecured. Unsecured debts are those that are free of any right to repossess. As the most commonly held type of debt in bankruptcy unsecured accounts range from credit cards and personal loans, to domestic support payments, medical or student loans. However, just because these accounts are all considered unsecured does not mean they are handled the same in court. For example, you may find that your credit card bills are discharged, but you are not likely to have your back-due domestic support payments or delinquent student loans erased. This is because some accounts are considered "priority debts" and are generally considered the most important in terms of repayment.
In a Chapter 7 filing, you would likely find that credit cards, medical bills, and personal loans are eliminated through a discharge. However, back due domestic support payments, back taxes and student loans are typically going to require some form of payment or asset liquidation as debt satisfaction. In a Chapter 13 case, all of your priority and secured accounts will be rolled into a repayment plan. A portion of your unsecured accounts may also be included in the plan, but how much is determined based on a formulation of your disposable income.
Secured debts are those that are tied to collateral. Mortgages, car loans, home equity and title loans are examples of secured debts. They are called "secured" because the lender maintains the right to repossess and liquidate the named asset in the event you default on the loan. These lines of credit can be handled through the bankruptcy process, but you will still be responsible for resuming payment if you wish to keep the property. What the bankruptcy process can do for your secured accounts is remove penalty fees, strip away second liens on the asset and lower the interest rate or payment amount in order to make resuming the payments more affordable.
The Lee Law Firm is a Texas bankruptcy firm that aims to provide local residents with high quality legal representation at affordable rates. Their attorneys are professional and compassionate, giving clients the personalized attention they deserve. When filing bankruptcy, the Lee Law Firm is the right choice to help in the face of financial hardship.
Article Source: http://EzineArticles.com/?expert=Christopher_M
Article Source: http://EzineArticles.com/7952675
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