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Know Your Debt What Is Secured and Unsecured Debt in Bankruptcy Atlanta, GA

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Know Your Debt – What Is Secured and Unsecured Debt in Bankruptcy?

Individuals exploring bankruptcy are often confused by the language and terminology associated with it. Bankruptcy is a complex process and requires an understanding of how each type of bankruptcy can benefit an individual and their family.

It is important for people trying to choose between Chapter 7 or Chapter 13 bankruptcy to understand the differences between debts and how they are treated in bankruptcy. For people living around Atlanta, a conversation with a Douglasville bankruptcy attorney can be extremely helpful. An experienced attorney will go over options for each individual and educate them about the respective benefits of each type.

Before that meeting, it is often useful for people to get a preliminary understanding of how debts are treated in bankruptcy. The key to dealing with debts is learning about the difference between secured and unsecured debt.

Secured Versus Unsecured Debt

A secured debt is one that is attached to another piece of property. The property is considered collateral. The lender retains the right to take back the property if the borrower does not make payments. This type of debt arrangement is often used for mortgages or car loans. People who want to keep secured items will need to keep paying for them in order to keep them.

In contrast, an unsecured debt is not attached to any property. This leaves the lender without any special collection rights against a debtor. The most common types of unsecured debts are credit card debts, medical bills and some loans.

Treatment in Bankruptcy Proceedings

People can manage their secured and unsecured debt differently depending on the type of bankruptcy they choose.

Chapter 7 bankruptcy is often attractive to people because it is relatively fast. Most unsecured debts will be discharged approximately three months from the filing date. Secured debts are not wiped away in Chapter 7 bankruptcy. Lenders do not lose the right to recover their property. People who want to keep their secured items must continue to make payments for them.

In Chapter 13 bankruptcies, people often put certain secured debts into their plan to get paid off over the course of the plan. The most common types of secured debts that are put into Chapter 13 plans are mortgage arrears and car payments.

Mortgage arrears allow homeowners the opportunity to stave off foreclosure by catching up on payments while being protected by bankruptcy’s automatic stay.

Chapter 13 plans are attractive to car owners because they can often get their cars paid off over the course of the plan, sometimes at more favorable terms. In addition, Chapter 13 bankruptcies will typically pay off some unsecured debt while discharging the balance at the end of the plan.

There are many factors that must be considered when selecting the right type of bankruptcy. Determining the best chapter requires an evaluation of an individual’s entire financial picture. If you are thinking about bankruptcy, you should speak with an experienced Atlanta bankruptcy attorney who can review your situation with you.

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    Jamie L. Gingold, PC
    5.0 / 5.0

    Based on 28 reviews

    Jack L.

    They did an excellent job with my case. Jamie took the time to really listen and understand things. She delved into the details and was extremely knowledgeable and non judgmental. Very professional and they know what they are doing. Would definitely recommend!

    Karen B.

    Dear Mr Gingold, There are so many reasons to be thankful for all you have done and will do. Anyone who has ever had unfavorable experiences with an attorney or the legal system will feel the trepidation that I experienced once I realized that my situation seemed hopeless. It was by chance and happily good luck that I decided to put my future and sanity into your hands. I was mortified at having to deal with my debts by claiming bankruptcy. I remember in our first meeting how you assured me that I was not alone and should not feel ashamed. And, anyone in this position obviously does not have money to spare and you were clear about all the costs and allowing me to pay according to my own ability to do so. You advised me in all aspects of the law, but also, you were at each meeting incredibly supportive and complementary of my personal and professional plans. Anyone else in this situation should feel blessed to have access to your expertise and support.

    Lyla B.

    I thought the process of filing bankruptcy was going to be a difficult one. However, Gingold & Gingold treated me with respect and dignity from the moment I walked through their door. I had the pleasure of working with Jamie. She is very responsive, professional, and knowledgeable. She took the time and listened to my every concern and handled each and every one of them to my satisfaction. My experience with filing bankruptcy under Gingold & Gingold's representation exceeded my expectations in a major way. They gave me such a peace of mind. I am very pleased with my decision of going with Gingold & Gingold to represent me when I filed Chapter 13 bankruptcy.

    Julie T.

    Wow! I am finally out of debt and can say that I am debt free after completing my chapter 7 bankruptcy case with Gingold and Gingold. Mr dangled was very knowledgeable and direct with regard to my debt situation. there were no surprises and the case went as I was advised. The staff was also very helpful whenever I had a question. I will definitely recommend them in the future to my friends.

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    I contacted getting old and getting old regarding some old tax debt and credit card debt that I needed to address and had been putting off. miss Irving in the office was very very nice and put me at ease. I met with Jaime Gingold. She was very nice and explained the procedure to me and what would be left owing to the Internal Revenue Service and the State of Georgia after my case was done. My case has now been completed and I am on my way to a new start. Thank you Gingold and Gingold for all of your help.

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