Do my all debts are discharged in Bankruptcy?

Bankruptcy is one of the most serious moments of one’s life whether personal or of the Company. In our opinion, personal bankruptcy is more serious and more problematic than the company’s bankruptcy. In any type of bankruptcy, you file, your first requirement would be to file a very good law firm. Loveland attorney are the best ones in Colorado if you’re looking for an attorney.

The Myth - Bankruptcy erases all of your debts

It’s a popular belief among people, that bankruptcy erases all debts. Maybe it’s being marketed like that and from there this belief came into existence. But, one who goes through these proceedings and thinks that every debt would be forgiven is not right.

The Truth

While it may sound disappointing, filing bankruptcy won’t erase all your debts. Personal bankruptcy is an option of last resort, for people who are overwhelmed with debts they cannot repay. In bankruptcy, you surrender all your assets in exchange for forgiveness of your debts. However, not all debts can be discharged by filing bankruptcy. While we also suggest looking for Loveland family attorney as usually, family relations may face difficulties during the bankruptcy process.

Secured vs Unsecured Debts

Loans and other financing methods available to consumers broadly fall into two major categories: secured and unsecured debt. In simple words, the difference between the two is the presence or absence of collateral.

Collateral is the backing of the debt and a form of security to the lender against non-repayment from the borrower.

Unsecured Debt

It requires no security. If the borrower defaults on this type of debt, the lender must initiate a lawsuit to collect what is owed.

Lender issues funds in an unsecured loan, based solely on the borrower’s credit score or creditworthiness and promise to repay. Also, banks usually give, unsecured loans and charge higher interest rates and are known as signature loans.

Secured Debt

Here the borrower puts up some asset as surety or collateral for the loan. Common types of secured debt are mortgages and auto loans, in which the item being financed becomes collateral for the financing.

Conclusion

It’s really important to know the difference between types of debts if you’re filing bankruptcy. All your debts won’t be forgiven. For more information, you can check out Loveland bankruptcy attorney to understand from the attorneys themselves