At one point or another, you’ve probably heard someone say that not all debt is bad debt. That’s great, but it’s not too comforting when you’re watching your debts pile up. You might be thinking, “How can this be good?” as you consider whether it’s time to call an Atlanta bankruptcy attorney.
As you look at your options and weigh Chapter 7 bankruptcy vs. Chapter 13 bankruptcy, it might help to know a bit more about your debts and how they can impact you. Let’s talk about a few things you should know about debt before you call a bankruptcy lawyer in Georgia.
Before You File for Bankruptcy in Georgia – What are Secured Debts?
First of all, if you’ve started reading about Chapter 13 bankruptcy or Chapter 7 bankruptcy, you’ve no doubt already run into the terms “secured debt” and “unsecured debt.” But what do those terms mean? And how will it impact you if you need to file for bankruptcy or opt for debt resolution?
Secured debt is any debt that’s “secured” by an asset. For example, if you take out a loan to buy a car, your loan debt is secured by your new vehicle. If you default on that debt, your lender can repossess your car.
What are Unsecured Debts?
Unsecured debts aren’t tied to any physical assets (you might hear people refer to these as “collateral”). So, if you default on an unsecured debt, your lender can’t repossess your property. That said, unsecured debts usually come with larger interest rates, and your creditors (lenders) can come after you in other ways – like garnishing your wages. A few examples of unsecured debt include medical bills and credit card bills.
Georgia Bankruptcy Alternative: Consolidating Debts can Help
Not everyone struggling with debt can qualify for Chapter 7 bankruptcy. And not everyone struggling with debt should file for Chapter 13 bankruptcy either. In fact, if you can avoid bankruptcy and you have the means to pay off your debts, this is usually the best way to go. Consolidating your debts so that you’re only paying interest on a single debt can save you a lot of money and help you get out of debt faster.
Debt consolidation and debt resolution aren’t the right answer for everyone, but they can be a good alternative to filing for bankruptcy in Georgia. Let’s talk about your debts – good and bad. Call Holston & Huntley today at (404) 620-3337 or fill out the form for a free debt resolution consultation.