Secured v. Unsecured Debt in Bankruptcy

Which debts are eliminated in bankruptcy?

There are 2 types of debt to consider in bankruptcy - secured and unsecured. Secured debt has collateral attached, such as your home or your car. Unsecured debt, such as credit cards or medical bills, do not have collateral attached. The amount and type of debt you have can determine which form of bankruptcy is right for you. Our dedicated Dupage County bankruptcy attorneys at the Law Office of Joseph P. Doyle have experience in all types of bankruptcy. In our free bankruptcy evaluation, we will help you determine the best course of action for your situation.

Secured v. Unsecured Debt in Dupage County

Successful completion of Chapter 7 discharges all eligible unsecured debt. If you have high credit card charges owing, or other unsecured debt, this could be the most feasible option. Under Illinois law, certain assets are protected from liquidation in Chapter 7. For example, your residence is protected up to $15,000, and your motor vehicle is protected up to $2,400. If you have a steady income and high equity in property you wish to protect, Chapter 13 might be your best solution.

It can help you stop foreclosure on your home or repossession of your property. Upon completion of a 3 to 5 year court-approved Chapter 13 repayment plan, all remaining debt will be discharged. Our knowledgeable Dupage County bankruptcy lawyers are well-versed in the pros and cons of Chapter 7 and Chapter 13. Let us put our experience to work for you.

Keeping Property under Bankruptcy

In a Chapter 7 bankruptcy, you must let the court know whether you want to keep or surrender your secured assets. If you want to keep the property, you must continue making payments. In a Chapter 13, you may be able to include secured property you wish to keep in your repayment plan. Another option is to continue making direct payments outside of bankruptcy. Contact us for professional assistance and expert legal advice.