If you are like many people in Ohio, when you think about filing for bankruptcy, you might automatically think about a Chapter 7 bankruptcy plan. This is generally the most well-known type of consumer bankruptcy. However, it is not the only one as many consumers find Chapter 13 plans better for their needs. Many factors will go into helping you decide what type of bankruptcy is right for you and one of these factors is what type of debt you struggle with the most.
As explained by The Motley Fool, there are essentially two primary forms of debt: secured debt and unsecured debt. A secured debt is one that is associated with a form of collateral, making is more secure from a creditor perspective because the creditor can seize the asset or collateral if payments are not made. One example of a secured debt is a vehicle loan. By contrast, an unsecured debt has no associated form of collateral. One example of an unsecured debt is credit card debt.
In a Chapter 7 bankruptcy, assets may be repossessed. For this reason, this type of plan may be a good fit for people who have predominately unsecured debt as they do not need to worry about losing their belongings.
If you would like to learn more about the different types of debt and how your debt portfolio may influence your decision about what type of bankruptcy might be right for you, please feel free to visit the consumer debt relief page of our Ohio bankruptcy website.