What is the difference between a secured and unsecured debt in Chapter 13 Bankruptcy?

In Chapter 13 Bankruptcy Law in New Mexico, there is a difference between a secured and unsecured debt. A secured debt is one that you have collateral for, such as a mortgage or car loan. This type of debt is secured by an asset and if you are unable to make payments, the creditor can take possession of the asset. An unsecured debt is one that is not backed by an asset, such as credit cards, medical bills, and personal loans. This type of debt does not have collateral and if payments are not made, the creditor cannot take any action against you since they do not have an asset to secure the debt. In Chapter 13 Bankruptcy, you are able to arrange a repayment plan of your debts over a period of three to five years. This repayment plan includes both secured and unsecured debts. With a secured debt, you must pay the full amount of the loan and keep up with your payments. With an unsecured debt, you may be able to negotiate a better payment plan that will reduce your payments significantly. This makes it easier for you to pay off your debts and eventually become debt free.

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What is the difference between a secured and unsecured debt in Chapter 13 Bankruptcy?

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