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

The principal difference between secured and unsecured debt in Chapter 13 Bankruptcy in New York is the way each type of debt is treated in the bankruptcy process. Secured debt is debt that is backed by collateral such as a mortgage or car loan. This means that if you default on the loan, the lender has the legal right to take the collateral in order to recover the debt. Unsecured debt, on the other hand, is debt that is not backed by any collateral. This can include credit cards, medical bills, and other personal loans. In Chapter 13 Bankruptcy, secured debts are usually paid in full according to the terms of the original loan agreement. This means that the lender will receive the full amount of the loan minus any fees, fines, and applicable interest. Unsecured debts, however, are generally treated differently in a Chapter 13 Bankruptcy. Instead of requiring that the full debt be paid, the court may restructure the debt by allowing the debtor to pay only a certain percentage of the total amount. In addition, the court may discharge some or all of the unsecured debts after a certain period of time. In summary, the primary difference between secured and unsecured debt in Chapter 13 Bankruptcy in New York is the way each type of debt is treated in the bankruptcy process. Secured debts tend to be paid in full, while unsecured debts may be restructured and reduced or discharged altogether.

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

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