FILING BANKRUPTCY ON UNSECURED DEBT

Bankruptcy, debt, debt consolidation, Debt Relief / By / March 21, 2020

Filing Bankruptcy on Unsecured Debts

If you are thinking about filing bankruptcy because you have unsecured debts, then you have come to the right place. Many individuals file bankruptcy each year because they are riddled with unsecured debts. Unsecured debt is debt that is not attached to anything. Some of the most common types of unsecured debt are credit cards, medical bills, personal loans. Secured debts, on the other hand, are secured by collateral. For example, a mortgage is attached to property by a lien. If the lien goes unpaid, the mortgage company can foreclose and take the home. The same goes for a vehicle. If you take out a car loan and fail to make the payments, the creditor can repossess or take back the car. Most Chapter 7 bankruptcy filings tend to be for people who have unsecured debts and can’t afford to pay their credit cards back.

How Does Filing Bankruptcy Effect Debt?

When individuals file a chapter 7 bankruptcy, their debt is wiped away through a discharge. General unsecured creditors are essentially not paid. This allows people to state over debt-free. In Chapter 13 bankruptcy, individuals pay their debt over a three to five-year plan. In many instances, general unsecured creditors will receive nothing because they are not considered priority debts.  Priority debts are debts that must be paid back.

What Types of Debt are Secured?

Some of these debts include IRS debt, student loans, domestic support obligations, and mortgage loans. The Court will look at your disposable income to determine if you need to pay back your general unsecured creditors in your chapter 13 repayment plan.

What Types of Debt are Unsecured?

  • Credit Cards
  • Medical Bills
  • Personal Loans

How Can I Tell What Kind of Debt I have?

If you are unsure about what type of debt you have, you can pull a free credit report online from one of the three major credit bureaus – Experian, Equifax, or Transunion.  A credit report will be able to tell you what types of debt you have.

If you are thinking about filing a New York bankruptcy or a New Jersey bankruptcy, contact our lawyers today. We can help you determine what type of debt you have and determine which type of bankruptcy is best for your financial situation. If you are struggling to pay your bills our bankruptcy lawyers can help you wipe away your debt in no time. Give us a call at (973)-979-9078 or email us at Karra@klkbankruptcylawyer.com