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

In Chapter 13 Bankruptcy law in New York, there is a difference between a secured and non-secured debt. A secured debt is a loan that is backed up by collateral, meaning that the creditor has the right to seize the item used as collateral if the debtor fails to make payment. An example of a common type of secured debt is a mortgage loan. A non-secured debt does not have any collateral to back it up. This type of debt is unsecured by any property or other items and is based solely on the promise of the debtor to pay it back. Examples of a non-secured debt include credit card debt and medical bills. Under Chapter 13 Bankruptcy law, secured debts are paid in full, while only a portion of non-secured debts are required to be paid. If a debtor has a leftover balance on a non-secured debt after they have completed their repayment plan, then the remaining debt may be discharged. This means that the debtor no longer has to pay that debt and the creditor will not be able to take any action to collect.

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

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