The type of debt a person has may influence their decision on the type of bankruptcy they file, especially if it means they will be able to maintain some of their possessions. Looking at the difference between secured and unsecured debt, it can be defined as with secured debt, if the payments are not made the person holding the note and reclaim the merchandise. Take heed and gain respectable debt reduction advice to keep yourself out of heavy debt.
Typically, secured debt involves a home mortgage or a car loan. In many cases of default, the car is repossessed and the house goes through foreclosure. Typically, merchandise taken through a loan default is auctioned and the debtor is liable for any remaining balance plus the cost of recovery and sale. In situations where a debtor is behind in payments and wants to keep their car and their house, a Chapter 13 may offer the relief they need.
The balances will still have to be paid on a plan worked out with the creditor, often the same payment as in the past while past due payments are paid through a plan approved by the bankruptcy court. This allows for breathing room for the debtor to begin putting their financial life...
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