During your bankruptcy claim, the courts will classify each of your debts. How your debt is classified will determine how the courts will treat it. The three basic types of debts are unsecured, secured and priority claims. The classification of your debt will play a major role in whether the claim can be discharged.
EXPERIENCED BANKRUPTCY ATTORNEY HELPS CLIENTS STRUGGLING WITH SECURED AND UNSECURED DEBTS IN NEW JERSEY
Secured claims are debts in which the creditor has a lien on your property. These debts involve property that a creditor can legally take when you default on your loan. You may have voluntarily pledged your property as collateral, or your creditor may have obtained a lien against you through a court judgment. Common types of secured claims include car loans, unpaid property taxes, mortgages and other liens on your property. Creditors can enforce secured debts through foreclosure, repossession or court action.
Unsecured debts, on the other hand, do not have property tied up in the loan. When you begin missing payments, a creditor cannot take any of your property without getting a court judgment. Utility bills, medical expenses, credit card debt, back rent, income taxes and personal loans are all forms of unsecured debts. If the creditor does file a lawsuit against you, then they may be able to proceed with collection in the form of wage garnishments. Most unsecured debts will be discharged during a bankruptcy claim, but student loans are one exception to this rule.
CONTACT THE LAW OFFICE OF JOEL R. SPIVACK FOR SOUND ADVICE ABOUT MANAGING YOUR DEBT
Priority claims are debts that cannot be discharged during bankruptcy proceedings. Priority claims take precedence over other debts and may include debts like child support, alimony payments, tax obligations or personal injury debts. A knowledgeable bankruptcy attorney can help you determine whether pursuing a bankruptcy case will help you relieve some of your financial burdens. Attorney Joel R. Spivack’s law office has successfully helped hundreds of clients find financial relief. To learn more about his services, contact his office at 856-488-1200.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney/client relationship. If you are seeking legal advice, please contact our law firm directly.