Types of Debt
One of the main distinctions to be made when considering filing for bankruptcy surrounds secured versus unsecured debt.
- Secured debt is debt that is protected or secured by collateral. This type of debt is not typically able to be discharged through bankruptcy. Secured debt can include a mortgage, car loan or appliance/furniture loan. Even though these debts are not dischargeable, it is still possible to keep your house and car through bankruptcy.
- Unsecured debt is debt that is not secured by collateral. Financial burdens such as credit card debt, personal loans, utilities or medical debt are typically dischargeable through bankruptcy.
Tax debt, unfortunately, is typically more complex. Some tax debt is dischargeable, but it must meet certain stringent criteria. We encourage you to schedule a consultation with a skilled bankruptcy lawyer to get your questions answered.