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Secured vs Unsecured Debt: Everything You Need to Know

Sawin & Shea

Declaring bankruptcy will discharge most types of debt but not others. Before you declare bankruptcy, it’s crucial to understand how the law treats the concept of secured vs unsecured debt. Chapter 13 involves commitment from the declarer to repay a portion of their debt over a specified period (usually three to five years).

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What is the Difference Between Secured and Unsecured Debt?

Sawin & Shea

However, which type of bankruptcy you file will also depend on what kind of debt you have. Secured and unsecured debt is handled differently in Chapter 7 vs. Chapter 13. What is Secured Debt? Secured debts are a type of debt backed by an asset that is used as collateral. What is Unsecured Debt?

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Section 1126 of the Bankruptcy Code and the Dangers of Sleeping on Your Rights as a Creditor

PBWT

This is especially true if you’re a creditor in a chapter 11 case. Two mortgage companies held more than $800,000 in secured claims, and 33 creditors had unsecured claims totaling about $1.1 The plan proposed to pay unsecured creditors $300,000 over five years and to make regular mortgage payments to the secured creditors.

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Who Can Declare Chapter 7 Bankruptcy?

Sawin & Shea

Chapter 7 is the most common form of bankruptcy for individuals and families, and it allows you to discharge many of your unsecured debts within only a few months. Chapter 7 bankruptcy is a form of personal bankruptcy that liquidates filers’ assets to discharge qualifying unsecured debts. What is Chapter 7 Bankruptcy?

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Consumer Debt vs. Non Consumer Debt

Sawin & Shea

They can assist you through the bankruptcy process and can keep creditors from unlawfully harassing you. In order to understand the bankruptcy process, here’s what you need to know about consumer debt and non-consumer debt. What is Consumer Debt? With consumer debts, co-debtors receive the protection of an automatic stay.

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Managing Bankruptcy and Medical Debt Relief in Broomfield, CO

Debt Free Colorado

You can consider filing for bankruptcy if you have overwhelming medical debt or persistent financial struggles. Some options are negotiating with creditors, structured payment plans, and debt consolidation. Chapter 7 Bankruptcy In Chapter 7 bankruptcy , eligible unsecured debts, including medical bills, may be discharged.

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How are Medical Bills Treated in Chapter 13 Bankruptcy?

Sawin & Shea

Filing for Chapter 7 or Chapter 13 Bankruptcy: Chapter 7 will wipe out (discharge) your medical debt along with other unsecured debt, but you must have low enough income to pass the means test in order to qualify for it. You will be placed on a payment program lasting from 3-5 years that prioritizes your debts. #4.