Different types of debt have different importance when filing for a Chapter 7 or Chapter 13 Bankruptcy. Some debts are required to be paid first, others are not a priority issue and are either secured or unsecured, and still others may not be able to be discharged at all. It is important to know what type of debt has accrued and what type of payment will be required. After the types of debt are established, the money will be divided among debts of priority, secured, and unsecured debt.
When filing for a Chapter 7 or Chapter 13 Bankruptcy in Denver, Englewood, Centennial, or Littleton, an experienced bankruptcy attorney will be able to assess your debt and recommend the best plan to proceed. Priority debt must be paid quickly and before anything else is settled. Child and spousal support, alimony, and tax debts are examples of priority debt which must first be paid after a successful bankruptcy filing, since they are not discharged.
There are several types of debt which may not be discharged. Taxes, child support and alimony are good examples of non-dischargeable debt. Student loans are another type of debt which may not be discharged in a bankruptcy. Student loans may either go into forbearance or deferment based on ability to pay, but these are serious marks against your credit. Even though a Chapter 7 or Chapter 13 bankruptcy will not solve the problem of student loan debt, the discharge of priority, secured, and unsecured debt may make the payment of those loans possible.
Secured debts are paid next. Secured debts come from loans in which collateral is involved. A home mortgage or car loan payments are examples of secured debts because these are backed by some type of collateral. The last priority debt is known as unsecured debt. These debts are backed by only the promise to pay. Medical bills and credit card bills are examples of unsecured debt because these creditors do not have anything against the individual, such as property, which will force them to pay.
If you are being hassled by creditors and are wondering what options are available to you or would like an assessment of the type of debt you own, contact experienced Denver bankruptcy attorney Barry Arrington at 303-250-7870 for your best, fresh start possible.