Differences Between Various Types of Debt :: Charlotte Bankruptcy Lawyer

Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is a bankruptcy discharge ?”

Though many people may believe that debt is debt, the reality is that all debt is not created equal. Differences between secured and unsecured debts are important and can impact a North Carolina bankruptcy filing. To find out more about how various debts are classified in bankruptcy, continue reading.


Debt Shackle Charlotte Bankruptcy Lawyer North Carolina Debt AttorneySecured debts


Secured debts include anything that has a lien against your property and which allows the creditor to repossess or foreclose on the property should you fail to make your scheduled payments. The debt is “secured” with rights to some piece of property which acts as collateral for the loan. A common example of secured debt is a mortgage on a home or loans on a car. In both cases, lenders are permitted to foreclose on or repossess property that has not been paid.


Unsecured debts


Given that secured debts include those things that have property attached as collateral, unsecured debts include loans that do not include rights of repossession or foreclosure. If these debts are not paid, lenders have no ability to take any items of the debtor’s property in return. Unsecured debts are further subdivided into priority debts and non-priority debts.


Priority debts


Priority debts are important in the context of bankruptcy because they are often non-dischargeable. This means that they cannot be wiped out by bankruptcy and they must be paid before other debts. Examples of priority debts include some back taxes, child support or alimony arrearages. 

Non-priority general unsecured debts


The least important category of debt, at least according to the U.S. Bankruptcy Code, are those that are non-priority general unsecured debts. These debts receive no special treatment and are the last to get paid during a bankruptcy filing. In fact, many non-priority general unsecured debts are discharged without any repayment. Examples of this include things like credit cards, unsecured personal loans or, most commonly, medical bills.


If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.



“The Difference Between Secured and Unsecured Debts,” by LaToya Irby, published at About.com.

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