There are two main kinds of debts. Unsecured debts are those in which no collateral is provided to borrow money, such as credit card debt. Secured debts, however, provide the lender with some sort of collateral on the loan. When debts become unmanageable, however, whether secured or unsecured, bankruptcy may be necessary.
Types of Secured Debts
Secured debts typically have a physical item or asset backing them, and these loans are often treated differently from unsecured debts during bankruptcy proceedings. Chapter 7 bankruptcy may discharge unsecured debts, but secured debts will often need to be negotiated with lenders.
Mortgages are a popular type of secured loan. A lender may be able to repossess a house in the event that payments cannot be made. Automobile loans are also often considered to be secured. Therefore, the bankruptcy process will likely not include automatically discharging these types of debts.
Bankruptcy is a complicated process. It is important to understand the process before filing as well as the effects bankruptcy may have on your life. Contact the Milwaukee bankruptcy attorneys of the DeLadurantey Law Office, LLC, to learn more about what filing for bankruptcy may be able to do for you. Call us today at 414-377-0518.