Not all debts are the same. If you are considering filing for Chapter 7 or Chapter 13 bankruptcy, it’s important that you understand the difference between secured debt and unsecured debt. You will need to make choices about your debt and property that will impact your life after bankruptcy. Talking to one of our experienced Albuquerque bankruptcy lawyers can help you make the decision that’s best for your own personal situation.
Any property that involves collateral may be considered secured debt. Mortgaged property, a vehicle, or equipment may all be considered secured debt. Because the debt is guaranteed by an asset, creditors have more leverage should the debtor default. Secured debt is not affected by bankruptcy. If it is not sold, it will be converted to an unsecured debt that will be discharged at the end of the bankruptcy proceedings.
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Chapter 7 Bankruptcy
In a Chapter 7 bankruptcy, many debts will ultimately be discharged. If you have secured debts, you have the option to surrender the property, or repay the debt in full in order to retain the property. This may not be the case with property that is secured, however. You may need to allow the creditor to repossess the property or repay the debt in order to keep the property. Our knowledgeable bankruptcy attorneys can advise you as to which may be in your best interests. Learn how to file for Chapter 7 bankruptcy.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy allows you to reorganize and repay your debts through a structured plan. If you are behind on certain types of secured debts, such as your mortgage or vehicle loan, you may have the opportunity to bring them current and pay them off. Learn how to file for Chapter 13 bankruptcy.
In order to properly receive a discharge of your debts in bankruptcy, it’s essential that you communicate accurately and openly about your financial position, debts, and assets with your Albuquerque, New Mexico bankruptcy attorney. Your attorney will ensure your information is correctly entered into your bankruptcy forms and can advise you on your options regarding debts that are secured.
To learn more about your options in bankruptcy and how you may be able to obtain freedom from debt and a financial fresh start, contact Melwani Law today for a free initial consultation today.