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

In Chapter 13 Bankruptcy cases, there are two different types of debts: secured and unsecured. A secured debt is one that is tied to some type of collateral, like a car or house. The debtor must make regular payments on the debt in order to keep possession of the collateral. If the debtor stops making the payments, they may be responsible for repaying the remaining balance of the loan. Unsecured debt, on the other hand, is not tied to any collateral and is usually made up of credit cards, medical bills, or other types of debt. In a Chapter 13 bankruptcy, unsecured debt is treated differently than secured debt. Unsecured debt is usually “dischargeable”, meaning the debtor is not responsible for paying back the full amount of the debt. The debtor will still have to make regular payments on the debt, but the amount they must pay back is usually much lower than the original amount. Overall, the main difference between secured and unsecured debt in Chapter 13 Bankruptcy is that secured debts are tied to some type of collateral and the debtor must pay back the full amount of the loan, while unsecured debt is dischargeable and the debtor only needs to pay back a portion of what is owed.

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

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