Bankruptcy Law, Timothy Kingcade Posts

How Bankruptcy can Affect Your Debts

Bankruptcy is a legal process, which allows an individual or company to either discharge most of their debts or pay them off through a structured repayment plan. For those who are considering filing for bankruptcy, it is natural to wonder what will become of their debts. This all depends on the type of debt that is owed and whether it is secured or unsecured. In bankruptcy, secured and unsecured debts are handled differently.

Secured debts like mortgages and car loans have collateral which serves to secure repayment. If a secured debt it not paid, the creditor may either repossess or sell the collateral to cover your debt. Unsecured debts like credit card debt and medical bills do not have collateral. If you fail to pay this type of debt, creditors may turn the debt over to a collection agency or file a lawsuit against you.

The type of bankruptcy you choose to file also makes a difference in how the debt is handled. The two most common types of bankruptcy are Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

In a Chapter 7 bankruptcy, unsecured debts are typically discharged a few months after filing. Secured debts may be cleared as well but it will not stop the creditors from obtaining the collateral. The only way to prevent this is to keep working toward paying off the secured debt.

Chapter 13 Bankruptcy

For those who file Chapter 13, a three or five-year repayment plan will be put in place for both secured and unsecured debts. In most cases, unsecured debt may not need to be repaid and is often discharged with a Chapter 13 bankruptcy. Regarding secured debts, creditors are unable to take the collateral if you are on a repayment plan.

While these rules seem straightforward, there are exceptions. It is important to note that certain types of debt may not be discharged in bankruptcy. These debts include:

· Alimony
· Child Support
· New debts after bankruptcy has been filed
· Certain student loans
· Certain taxes
· Debts with a co-signer
· Fraudulent debts

Every case is different, so it is important to consult with a qualified and experienced bankruptcy attorney to help you through the process and find the best debt-relief solution for you.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at