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What Is A Secured Debt?

To file for Chapter 7 bankruptcy, your eligibility is generally established by debts, income and living expenses. To determine the manner in which the debt will be satisfied, a classification of the debt is necessary. A secured debt is one in which the debtor loses an item if payment is not made. An experienced bankruptcy attorney can help you determine whether you possess a secured debt.

Types of secured debts

Upon signing a loan document, you provide a creditor a security interest in your property, whether it be a car or home. Examples of common secured debts and liens include: 

  • Loans for boats, motorcycles, tractors, cars or RVs: If you neglect in paying, the lender can repossess the vehicle.
  • Mortgages: To buy or refinance real estate, a loan is often undertaken, and if you miss a payment, the lender may foreclose and take your house.
  • Home equity loans: If you fail to compensate the lender, your house may be foreclosed upon.
  • Judicial liens: If someone sues an individual and wins a judgment, a judgment can be ordered against the individual in the form of a lien. 
  • Statutory liens: These include liens that are provided automatically by statute, such as a mechanic’s or contractor’s lien. 
  • Tax lien: If you owe money to a taxing authority, such as the IRS, a tax lien may be imposed. 
  • Personal loans from credit unions, banks, or fiancé companies: If one presents an item of personal property as a collateral for these types of loans, then the collateral can be repossessed if payments are not made. 

To determine the classification of your debt, contact a dedicated New York bankruptcy attorney who is interested in learning each client’s story.

Seek caring assistance from an effective New York bankruptcy lawyer

By retaining the Mark E. Cohen, Esq. office, you are able to acquire first-class representation. The Westbury office represents clients throughout New York City and the surrounding areas who seek to file for bankruptcy. 

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