Some creditors have stronger claims on your assets than others.  How can you maximize your debt relief while minimizing the risk of losing your property?

Not all debts are the same, and not all creditors have the same power in your 341 meeting during Provo bankruptcy.  With good planning, you can discharge the debts that give you the relief you need and minimize the risk of losing your car or your home.  The difference is in secured debt, unsecured debt, and a contract stipulation called a lien.

Secured debts are made for specific, high-cost assets such as automobiles and real estate.  Your car and home mortgage loans are secured debts.  Secured debt contracts give the rights to the asset (the car or home) to the creditor if the debtor stops making payments on the debt.  The creditor’s legal claim on your property is a lien. If the debtor has filed for Provo bankruptcy and wants the secured debt discharged, the creditor can make a claim on the asset.  These secured claims are the first consideration during the 341 meeting.

Unsecured debts have no assets connected to them.  Credit card and medical debts are unsecured.  If a debtor stops making payments on these debts, the creditor has a general unsecured claim on the debtor’s property.  These claims are less powerful than secured claims during the 341 meeting of Provo bankruptcy.  Debtors can defend their assets from unsecured creditors more easily than from secured creditors.

The temptation is to discharge as much debt as possible.  In truth, which debts you choose to discharge is an important decision that can make the difference between successful provo bankruptcy and failure.  If you can get control of your finances by only discharging unsecured credit card and medical bills, the risk of losing your car or home are nearly zero.

This is an important option to keep in mind while planning your Provo bankruptcy.  The best way to find your best option is to fill out a free evaluation form today.

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