Types of Debt in Chapter 13 Bankruptcies

 Posted on February 08, 2019 in Chapter 13

There is more than one type of bankruptcy, although Chapter 7 and Chapter 13 bankruptcies are the most common. In a Chapter 13 bankruptcy, your attorney and a team of other professionals are able to help you develop a repayment plan to pay back your debts. The repayment plan lasts for three to five years, depending on a variety of circumstances. Chapter 13 bankruptcies can be beneficial to individuals because it allows you to keep certain assets, such as your vehicle or your home. In a Chapter 13 bankruptcy, certain debts must be repaid before other debts.

Priority Debts

Priority debts are exactly what they sound like -- priority over other debts. These debts must be included in any repayment plan you enter and the plan must make sure that your priority debts are paid off first and in full. Typically priority debts include:

• Past-due child support;
• Past-due spousal support;
• Unpaid taxes; or
• Unpaid wages that you owe employees within the past six months.

Secured Debts

Debts that can be secured by certain property are called secured debts. These types of debts are called secured debts because they can be attached to specific property. If you fail to repay the debts as agreed, the creditor can take back the property. The most common examples of secured debts include:

• Home loans or mortgages; or
• Car loans.

Unsecured Debts

Unsecured debts are basically all other debts that you may have. Unsecured debt has no property that can be attached to it, so there is nothing that the creditor can repossess if you do not pay. Common examples of unsecured debt include:

• Medical bills;
• Credit card debt;
• Personal loans;
• Utility bills; and
• Business loans.

A Texas Chapter 13 Bankruptcy Attorney Can Help

United States bankruptcy law is extremely complex and is best handled by a professional. At the Law Offices of Chance M. McGhee, we have dealt with over 20 years worth of bankruptcy cases and we know the ins and outs of the bankruptcy process. Our skilled New Braunfels Chapter 13 bankruptcy lawyer can help you sort out your finances and come up with a repayment plan that works for you. To get started reviewing your case, call our office at 210-342-3400 to schedule a free consultation.

Source:

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics