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

In Chapter 13 Bankruptcy, a secured debt is a debt where the borrower has pledged collateral (something of value) to the lender, such as a house or car. The lender can repossess this collateral if the borrower fails to make the payments. Non-secured debt is debt that is not backed by any collateral. Examples of non-secured debt include credit card debt, medical bills, and personal loans. In Chapter 13 Bankruptcy, secured debts are given priority over non-secured debts. This means that secured debts must be paid in full or in part before any non-secured debt can be paid. This is because the lender has the right to repossess the collateral to recover the money owed. The remaining non-secured debt is then divided among the creditors. In Chapter 13 Bankruptcy, debtors must also disclose their assets and liabilities to the court. The court then approves a repayment plan based on the debtor’s income and the amount of debt they owe. This repayment plan must be followed according to the court’s instructions. If the debtor fails to make the payments, they may be subject to penalties. In summary, the difference between a secured and non-secured debt in Chapter 13 Bankruptcy is that secured debt must be paid in full or in part before any non-secured debt can be paid. Additionally, debtors must disclose their assets and liabilities to the court in order to have a repayment plan approved.

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

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