Bankruptcies are often complicated. It can be very difficult to face a proceeding on your own. You will likely want to complete the process as soon as possible. There may be a difference in how you understand your debts and how they are managed during bankruptcy. While secured and unsecured debts are the same, depending on which bankruptcy chapter you file, they will be treated differently based upon the type of filing. When deciding which type of bankruptcy to file, and how your debts will manage during proceedings, it is important to consult an attorney like a Tampa bankruptcy lawyer.
Types Of Bankruptcies
Without the help of an attorney, determining the right chapter to file can be difficult. A debtor can choose between two types of bankruptcy. There are many benefits to each type of bankruptcy, depending on your circumstances. It is important that you consult an attorney before deciding which option is best for you.
Chapter7: is also called a complete liquidation. The process will result in the discharge of a large portion of your debts. To ensure exempt assets are liquidated, and that your debts are as resolved as possible, a trustee will oversee the entire process. Chapter 7 bankruptcy can usually be completed in less than 120 days. To be approved for Chapter 7, you must meet certain eligibility requirements. Chapter 13 is an alternative option for those who are not eligible for Chapter 7.
Chapter13: is also called a wage earners bankruptcy. Chapter 13 allows the debtor to pay back most of their debts. Chapter 13 is often for those who make too much to qualify for Chapter 7 but still want to keep their assets or property. Chapter 13 requires that debtors prepare a repayment plan which they can present to bankruptcy courts. Your repayment plan should detail how you will repay your debts. A Chapter 13 bankruptcy can last between 3-5 years before it is finally resolved.
Secured Debts
If you are unable to pay your bills, secured debts can be repaid by the creditor. Secured loans can be larger in amount and have a lower interest rate. Secured debts include:
- Car Loans
- Mortgages
Unsecured Debts
In most cases, unsecured creditors cannot claim your property or assets if you are unable to pay them. Unsecured debts can include:
- Credit Cards
- Student Loans
- Medical expenses
- Phone Companies
- Utilities
- Rent
Not all of these debts can be discharged through bankruptcy proceedings. These debts are known as priority debts. They can include student loans, child support, and alimony. These debts may be paid first in bankruptcy proceedings if assets are liquidated.
Bankruptcy is a difficult and complicated process. A bankruptcy attorney can help you determine the secured and unsecured debts in your case. It is important to find an experienced attorney in handling bankruptcy proceedings.
This post was written by Trey Wright, a sought-after Pensacola bankruptcy attorney! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.
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