What are secured and unsecured debts in bankruptcy in Minneapolis, Minnesota?
When you consult with an attorney to discuss bankruptcy, he will ask you about your debts and whether you have secured or unsecure creditors. Unsecured creditors do not have collateral to secure their debts. Credit cards, medical debts, personal loans and payday loans are common examples. Student loans, tax debts, and student loans are also included. Mortgages, recreational loans, and vehicles are common examples. Tax debts can also be secured.
When you file for bankruptcy, your unsecured debts will be discharged. Except for student loans and certain tax debts. However, your secured lenders are made up of two parts. The first is the security interest and the second is your obligation to pay the debt. Your liability to repay the loan will be discharged when you file bankruptcy. Security interest is still retained. What does this mean exactly? Even if your personal liability for the loan is discharged, you still have to pay the collateral. You can return the property to the lender if you don’t want it to be tied to the loan. You will be notified by all your creditors, both secured and unsecured, that you have filed bankruptcy. This is true even if you are going to keep paying your secured creditors and want to keep them.
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