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Secured and Unsecured Debt Basics

Michael Agruss

Written and Reviewed by Michael Agruss

  • Managing Partner and Personal Injury Lawyer at Mike Agruss Law.
  • Over 20 years of experience in Personal Injury.
  • Over 8000+ consumer rights cases settled.
  • Graduated from the University of Illinois Chicago School of Law: Juris Doctor, 2004.

If you are considering the opportunity of a discharge via Chapter 7 bankruptcy, you may be wondering what it does and does not do. Generally speaking, a discharge can clean your financial slate and remove much of your debt-liability, which can stop creditors from continuing to attempt to collect on that debt.Keep in mind, however, that a discharge can be undone in certain situations. Some examples include cases in which the debtor: committed perjury during bankruptcy; moved, hid, or destroyed assets; did not maintain or provide necessary financial records; or failed to take other necessary steps, such as a financial management course.“Secured” debt, which involves a loan backed by collateral, can be difficult to discharge, as there are additional options available to the creditor despite your bankruptcy filing; in some cases, collateral may be seized even after that debt is discharged. Examples of secured debt may include car loans, mortgages, and personal loans from finance companies. While unsecured debt is not backed by collateral in the same way, the creditor may still attempt to secure it if you have defaulted on the loan, such as by filing a lawsuit and obtaining an “Abstract of Judgment.”Whether your debt is secured, unsecured, or both, if you are struggling financially and feel like you’re out of options, you’re not alone. Contact an experienced bankruptcy attorney today for a free consultation.

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