Understanding Secured Vs. Unsecured Debt
As you are considering your debt relief options, the nature of the debt you wish to discharge can play heavily in your decision regarding the bankruptcy chapter under which you choose to file.
Before you decide on a particular debt relief solution, our attorneys at Advanced Bankruptcy Legal Services of Connecticut can explain what you need to know about secured vs. unsecured debt and which bankruptcy solution is best for your specific situation. It is the accrual of and the inability to pay unsecured debts that usually lead most clients to file for bankruptcy protection.
What Is Secured Debt?
Secured debts are backed by some type of collateral, which functions as “security” for the debt. Home mortgages are typically secured by your house; similarly, auto loans are typically secured by your car. In these situations, if you are not able to repay the debt, your creditor has the right to force the sale of the property being used as collateral to repay the debt.
Depending on the circumstances surrounding your case and the type of property involved, it may be possible to repay your arrearages in a Chapter 13 filing and get current on your payments all while retaining the use, possession and enjoyment of your property.
General And Priority Unsecured Debt
Unsecured debts are obligations with a simple promise to pay without the creditor taking collateral to secure the promise. Priority unsecured debts are paid first in a bankruptcy. These often include nondischargeable debts such as child and spousal support, certain income tax debts and payments for certain legal judgments.
General unsecured debts can include medical bills and credit card debt. For many people, Chapter 7 bankruptcy can be a good option for obtaining relief from the financial burdens of excessive unsecured debt.
Advice From Experienced Bankruptcy Lawyers
At Advanced Bankruptcy Legal Services of Connecticut, we provide comprehensive consumer bankruptcy services to clients throughout Connecticut and locally throughout the Hartford County region. Our attorneys have practiced for decades and helped numerous clients. You can rely on us for honest advice aimed at helping you regain control of your financial situation and giving you the fresh start that you need.
Schedule A Free Initial Consultation Today
Contact our office to discuss your debt relief questions. We offer a free initial consultation to all new clients and serve the state of Connecticut. Call our New Britain office at 860-674-8003 or our Bloomfield office at 860-242-0574 or email us to schedule a free consultation.