Your Debt

There are general four different types of debt; secured debt, priority unsecured debt, unsecured debt and statutorily non-dischargeable unsecured debt.

Secured Debt

Secured debt is the debt you own on property that can be taken away from you if you don’t remain current on your payments. For example, if you don’t make the monthly payments on your home mortgage, the bank has the right to use the foreclosure process to take your home away. Another example is if you get behind on the monthly payments for your car, boat or motorcycle, the bank can repossess these vehicles. Because of their right to take back your property if you are in default on the payments, these creditors are considered secured.

Priority Unsecured Debt

This type of debt consists of money owed for taxes, domestic support obligations like alimony or child support and claims for injury caused by drunk driving and a few others. These types of debts are generally not dischargeable.

Unsecured Debt

Unsecured debt consists of credit card balances, medical bills and personal loans. This type of debt is dischargeable under either Chapter 7 or Chapter 13. However, there are certain types of unsecured debt that are statutorily non-dischargeable, such as student loans and government fines like speeding tickets.