What’s the Difference between Secured and Unsecured Debts?
A person filing for bankruptcy may notice a considerable difference in the way secured debts and unsecured debts are treated by the court. Depending on the type of debt, a creditor may have different rights and abilities during a bankruptcy proceeding. In particular, debtors with large amounts of secured debts may lose a considerable amount of property if they fail to file the proper exemptions.
If you have been considering filing for bankruptcy, we can help you to get started on the road to debt freedom. For more information about your full range of options and what you should expect during the process, contact Florida bankruptcy attorney Ryan J. Really, Attorney at Law, PLLC, at (239) 237-0675 today.
What to Know about Secured and Unsecured Debts
When a person files for bankruptcy, they may need to give up property held as collateral if they have significant secured debts. These debts are specifically set up to allow creditors to foreclose on or repossess properties that are not paid for by a debtor. Unsecured debts, on the other hand, are not tied to collateral. The differences between these types of debt can include:
- Secured debts can be enforced through repossession or foreclosure
- Unsecured debts require legal action to enforce
- Exceptions to requiring legal action for unsecured debts can include student loan debt
- Creditors must show proof of secured debts in bankruptcy, “perfecting” the lien
- Unsecured debts do not require the same process
Although unsecured debts may be seen as a less immediate threat to a person’s financial stability, as there is not any collateral tied to the loan, they can still present a serious danger. In fact, some unsecured debts cannot be discharged during bankruptcy. These debts include student loan debts.
If your debts have become too much for you to handle, we may be able to help you guard yourself from repossession or foreclosure. For more information about your options, contact Florida bankruptcy lawyer Ryan J. Really, Attorney at Law, PLLC, by calling (239) 237-0675.