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Chapter 11 and Unsecured Debt

Chapter 11 and Unsecured Debt
"""When filing for Chapter 7 foreclosure, you must list both secured and unsecured obligations. The goal is for the bankruptcy trustee to inform the judge whether any of your properties can be sold to repay your creditors.

In the case of secured properties, the creditor may have the right to repossess the property, depending on the circumstances. In the case of properties that are not secured by a lien, however, the creditor has no right to seize any of your assets. Before the judge can rule on your bankruptcy petition, you and your trustee will be required to provide him with an inventory of your secured and unsecured debts.

The majority of people's debts fall into the category of unsecured obligations. For instance, credit card debt is the largest unsecured item on the list of most individuals who file for bankruptcy. In the past two decades, the number of credit cards in people's possession has virtually expanded. The practice of millions of people borrowing and charging items beyond their means on their credit cards is contributing to this expansion. And in recent years, as millions of jobs have vanished from the economy, many people have found themselves in a position where they cannot pay back the credit card debt they owe. This circumstance compels many consumers to file for bankruptcy.

Medical bills are the second largest unsecured form of debt that many bankruptcy filers have in common. Millions of individuals have no health insurance. Even though millions more have health insurance, they are underinsured. When a calamitous illness such as cancer strikes a family in this situation, the mounting medical expenses can easily bankrupt them. After refinancing their property and maxing out their credit cards to pay for medical treatments, they are left with nothing. When this occurs, individuals frequently have no option but to file for bankruptcy.

Other common forms of unsecured debt include alimony, child support, loans from family and friends, and utility expenses such as your phone, gas, or electric bill. The court will evaluate the importance of your unsecured debts. For instance, delinquent taxes will take precedence over unpaid gas bills. Child support will take primacy over issues such as rent arrears.

The good news for the family is that, in most cases, the bankruptcy will wipe out these unsecured obligations, allowing the family to start over.""

" - https://www.affordablecebu.com/
 

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"Chapter 11 and Unsecured Debt" was written by Mary under the Finance / Wealth category. It has been read 134 times and generated 0 comments. The article was created on and updated on 03 June 2023.
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