Unsecured Debt and Bankruptcy
Unsecured debt is debt that you owe which is not secured by an asset...
There are two types of debt, secured and unsecured. Yesterday's blog we talked about secured debt, what it means and what happens if you file for bankruptcy. Today we will focus on unsecured debt.
Unsecured debt is the opposite of secured debt. It is debt that you owe which is not secured by an asset. A good example of this kind of debt would be credit card debt. You owe money and your creditor has no property to be used as collateral should you default on your payments.
When you file for Chapter 7 bankruptcy, your unsecured debt will be discharged and you will not have to pay. If you file for Chapter 13 bankruptcy, you will work out a plan to repay your debt over a period of 3 to 5 years. Of course, there will be instances where some debts will not be dischargeable.
Contact mclawgroup.net for a more detailed explanation of unsecured debt in bankruptcy.