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Debt is one of the most overwhelming things in life. And when you’re already carrying this impossible burden every day, the last thing you want is to talk about it.
But if you’re interested in the relief that Raleigh bankruptcy offers, the first step is to face the problem head-on. That means taking a close and honest look at the type of debt you have, so you can decide which kind of bankruptcy is right for you.
Don’t worry because you are not in this alone— Weik Bankruptcy Attorney will guide you through the entire process.
To help you take that first step, let’s discuss the three main categories that most debts fall under. These are secured debt, priority unsecured debt, and non-priority unsecured debts.
Secured Debt
A secured debt is one that you are legally obligated to pay back. This can be a mortgage on your primary residence, an auto loan for the family car, or other types of loans.
Secured debt is typically considered a priority debt, meaning that it must be paid back before your other debts.
If you want to keep your home or car, our Raleigh bankruptcy lawyer may recommend filing for Chapter 13 over Chapter 7. Filing under Chapter 13 can offer certain protections, so you aren’t forced to surrender them.
Chapter 13 bankruptcy is often called a “wage earner’s plan.” This is because it allows you to pay back creditors over three to five years while continuing with your life and keeping up with your payments.
If you think this may be right for you, we recommend looking into our other articles:
- Can Chapter 13 Bankruptcy in Raleigh Help You Keep Your Car?
- Can Filing for Bankruptcy in Raleigh Stop Eviction?
Priority Unsecured Debts
Priority unsecured debts don’t have collateral, but they must be paid in full much like secured debts.
Specifically, most priority unsecured obligations are to the government. Financial responsibilities to a previous spouse or your children are also considered priority unsecured debts.
Here’s a quick list of common priority unsecured debts:
- Child support
- Tax debts
- Alimony
- Repayment of government benefits
- Criminal fines
- Judgment from personal injury lawsuit in which you were driving while intoxicated or drugged
In other words, the government considers this type of debt essential, which is why you’ll still need to pay them back. For more information on how bankruptcy works for this type of debt, read more here:
- Do You Still Have to Pay Child Support Under Bankruptcy in Raleigh?
- Divorce, Alimony, and Raleigh Bankruptcy
Non-Priority Unsecured Debt
Non-priority unsecured debt is the third type of debt, and one which bankruptcy is extremely effective for.
This could include things like credit card bills, utility payments, medical expenses, and personal loans.
In most cases, bankruptcy will not require you to pay for non-priority unsecured debts in full. In fact, Chapter 7 bankruptcy is designed to discharge this type of debt— in essence, wipe them out fully, with some exemptions.
If you’re struggling with this type of debt, we strongly encourage you to read the following
- Credit Card Debt and Bankruptcy in Raleigh
- Can Chapter 7 Bankruptcy Stop Utilities from Being Shut Off?
- Eliminate Medical Bills with Chapter 7 Bankruptcy in Raleigh
You Can Be Debt-Free Starting Today
In conclusion, knowing what type of debts you have can help you make the best choice about what kind of bankruptcy in Raleigh, NC you should file for. We would be honored to help because we understand that this can be a difficult process.
Weik Bankruptcy Attorney has helped hundreds of Raleigh individuals and families find relief from their debts through Chapter 7 and Chapter 13 bankruptcy in Raleigh, North Carolina. We’d be very happy to do the same for you.
Call Weik Bankruptcy Attorney today at 919-845-7721 for a free consultation, and set up a time to speak with one of our friendly professionals.