What Are Unsecured Debts?

One of the most common questions that an individual asks when considering bankruptcy involves the difference between secured debt and unsecured debt. Unsecured debt is any debt that does not have collateral associated with it. That is, there is not a specific piece of property attached to the loan. For example, your mortgage is secured debt. If you cannot meet payment obligations, the bank may be able to foreclose (take back) the home. Your credit card, on the other hand, is an unsecured debt. Credit card companies still have rights regarding collection, but there is no piece of specific property that they can take if you fail to repay.

At the Chicago, Illinois, law firm of Billbusters, Ledford, Wu & Borges, LLC, our lawyers will carefully examine your financial situation as you are considering filing for bankruptcy. We can provide legal advice on the types of your debt that can be discharged, and the types of debt that will remain with you. Contact our office to schedule a No Obligation Consultation.

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There are several kinds of debt that are considered unsecured, including:

Typically a Chapter 7 filing will discharge or eliminate all unsecured debt almost immediately, although there are notable exceptions. Conversely, a Chapter 13 filing will discharge the remaining unsecured debt after the individual successfully completes the repayment period, which will include paying at least a small portion of the unsecured debt off.

We understand that all situations are unique. To have a more detailed discussion about how bankruptcy can help you get a fresh financial start, contact our offices immediately. With seven locations throughout Illinois, we are ready to help you.

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Learn more about the difference between secured debt and unsecured debt. Call 312-651-4200 or contact our offices by e-mail to discuss your options during a No Obligation Consultation with an attorney.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.