What is the difference between unsecured and secured debts?
Debts can be classified in two different categories – unsecured and secured. When a debt is secured, the creditor can seize the property committed by the debtor as collateral in the event that he or she fails to submit payments according to the terms of the established agreement. For example, auto loans are typically secured by using the vehicle itself as collateral. In another case, student loans, a debtor’s wages may be subject to garnishment for nonpayment. Secured debts are not typically dischargeable through bankruptcy.
Unsecured debts, by contrast, are debts without any collateral backing them. These may be medical bills, credit card debts, personal loans, and others. Due to the lack of a secured interest, these debts are frequently able to be discharged through a successful bankruptcy filing.
If you are currently struggling to stay afloat financially, we can help you to determine whether bankruptcy might help to alleviate some of your distress. Contact the Milwaukee bankruptcy attorneys of the DeLadurantey Law Office, LLC, by calling 414-377-0518 today.