If you are in debt and are considering filing bankruptcy, one of the main questions on your mind is likely whether the bankruptcy will discharge (eliminate) your debt. The answer depends heavily on whether your debt is secured or unsecured. Having a basic understanding of how each type of debt is treated in bankruptcy can help you decide whether bankruptcy is right for you and which type of bankruptcy you should file.
Bankruptcy proceedings are often intense and incredibly complex. For the uninitiated, the terms that attorneys and judges throw around often sound like a different language. Nevertheless, if you are interested in learning more about bankruptcy, it is important to learn some of the fundamental concepts so that you can make well-informed decisions.
If you are planning to file for bankruptcy protection, you are probably wondering what will happen to your secured debts, such as your home loan or car loan. A secured debt is created by any loan where you have pledged an asset to the lender as collateral. If you fail to make your payments on a secured loan, the lender is granted the right to seize or foreclose on the collateral.