In a Chapter 7 case your unsecured debts are either priority or general unsecured. Chapter 7 legally writes off all or most of the latter. Last time we said there are two kinds of unsecured debts, “priority” and “general unsecured”: “Priority” debts are those that the law treats as special for various reasons. Past-due child support and unpaid recent … Read More
Unsecured debts are not legally attached to anything you own. They have no security. Certain special unsecured debts are “priority” debts. Unsecured Debts Debts that are unsecured are those which are not legally tied to anything you own. The creditor has no “security” attached to the debt, no “security interest” in anything. It has no right to repossess or … Read More
The laws about the treatment of different types of creditors can often be used in your favor to pay who you want or need to pay.
In most Chapter 7 cases, there is not much practical effect to what creditors put on their proofs of claim.
Here’s a scenario showing how Chapter 13 solves problems that Chapter 7 doesn’t solve in dealing with a creditor’s disputed lien.
When a creditor may not have a valid lien, Chapter 13 gives you a good way to defeat that disputed lien and the claim against your property.
For a debt to be secured, the creditor has to go through the right legal steps. Otherwise you don’t have to pay the debt.
Because of Chapter 13’s much more powerful automatic stay, its ability to prevent judgment liens and tax liens is extremely valuable.
Creditors with secured debts often have much more leverage against you than with unsecured debts.
Bankruptcy gives you options for taking charge of your financial life.
Which of the two consumer bankruptcy options is better for you if you have lots of unsecured debts depends on the kind of unsecured debts.