Most people think “money owed is debt,” regardless of the debt type. But truth be told; there are different kinds of debt and they are not treated equally. The two main types to keep in mind are “unsecured debt” and “secured debt.” Credit card charges, payday loan cash advances, cell phone, utility or cable bills, personal loans and medical expenses are all examples of “unsecured” debt. Although these types of debts don’t have collateral, don’t let them fool you because they are fast growing and the most expensive to payoff if you get behind. “Secured” debts usually involve a home, boat, car or other large purchase with collateral. The item financed is collateral. This means that the lender will come first for the item, and second for any remaining balance.
Interestingly, CreditCards.com performed a seven-year survey to find out how many adults expect to “die in debt.” In the beginning, the number was 25%. Today that number is only 7%. This signifies the growing confidence in America; that’s good news. The bad news is that nearly 30% of survey respondents expect to add more debt in 2020. (Nearly half note credit card charges.) Although the economic future looks bright, it’s no time to rack up more debt. The opportunity to control, stop, or eliminate debt has never been better!
Ideally, paying off high-interest unsecured debts first would be a smart strategy. However, when it’s too difficult to keep up with secured and unsecured debt; consider a free debt consultation with a bankruptcy attorney. What can bankruptcy do? For starters, it can stop creditors immediately, save your car and get back your peace of mind. Depending upon which chapter is filed, and the type of debt you have, filing bankruptcy can be a smart move. For example, the overall debt load can be negotiated for reasonable repayment or debt could be removed altogether. Most unsecured debt can be eliminated completely. In some cases, even tax debt can be eliminated. Other debts such as student loans, child support and alimony cannot be discharged in bankruptcy. But don’t get discouraged. Most people find that by freeing up all the other debts, the tricky few leftovers can be quickly addressed.
Can Debt Types Change?
Don’t wait for the bank to sue you! As scary as it sounds, unsecured debt can become secured debt. Here’s how: When a debt is unpaid, lenders hire the best debt collection agencies. If all attempts to collect fail, the banks can sue you. When a bank sues you, they can go for your home, your car, or other property. Therefore, unsecured debt like credit card bills can suddenly become a secured debt. You might have been put in an impossible medical situation or made some bad financial choices in the past. Life happens. What you shouldn’t do is sit on your debt problem as it morphs into something bigger and more complicated. Stop that nightmare right now.
Milwaukee Debt Lawyers
At some point, when debt has really messed things up, you’ll find yourself reading articles like this looking for help. Debt Advisors Law Offices are the best Milwaukee area bankruptcy lawyers. Whether you need help with secured debt, unsecured debt, or a combo of both…we can help. If you’ve never heard about us, read Milwaukee bankruptcy reviews from REAL clients who have stories like yours. We advocate for consumer rights. We love helping people in financial stress, and we are successful in doing so.