Are you facing a financial situation that involves an unbearable amount of debt? If you are unsure of the legal differences between these two terms, it could be helpful to speak with a Chicago bankruptcy lawyer to find out what type of debt you have and how it can affect your personal situation.
Every type of debt can be treated in a different manner and may even impact the chapter you file under. When you file for bankruptcy, you may have to list your assets and debts. All of your debts can be classified by their type. It is important to know what types of debt are unsecured and which are secured.
Secured debt is created after the debtor has a loan that is backed by a type of collateral. Common examples of collateral include assets or revenue that a borrower owns. Interest rates on these types of loans are often less.
If you have a mortgage or vehicle loan, these are likely secured debts. When the borrower is not able to pay their debt and the account become delinquents, the creditor can foreclose the home or repossess the vehicle. The lien placed on your property can entitle the creditor to take the property back if the debt is not paid.
Unsecured debt is not guaranteed by collateral. That means that defaulting on a payment, the creditor may not be able to take anything from you. The creditor who is associated with your unsecured debt can take steps to secure the debt if a default is placed on the loan. The creditor can file a law suit against the borrower and obtain an "Abstract of Judgment." It is essential to speak with an attorney if you are facing unsecured debt and need it to be discharged.
If a judgment has been filed against you or if there has been a lien placed on your property, it is important to obtain the aggressive and knowledgeable legal assistance of a Chicago bankruptcy lawyer. Your debt may not only damage your credit score but can also chase you for an unknown amount of time.
We are prepared to help you not only learn more about both of these types of debt but to also find a solution for your specific case. Our firm can provide you with the tools necessary to achieve a successful result.
If you are thinking about filing for bankruptcy, you must have a clear understanding of whether your debts are unsecured or secured. A Chicago bankruptcy lawyer from our firm can help you figure out what debt can be discharged during bankruptcy. Not all can be discharged and we can help you file and guide you through each step. Our firm can help you distinguish between your secured and unsecured debts so that the bankruptcy process can be as smooth as possible. Each individual that files may encounter specific circumstances of their own that are often related to the type of debt they are discharging.