Occasionally falling slightly behind on your bills is a normal aspect of life, but there are times when your debts can far exceed anything you could hope to repay, and when this happens, you will need to consider seeking the protection of bankruptcy. However, if you have never filed for this protection or even considered it, you will likely be better able to understand this option after you have the following two question answered.
Why Is Unsecured Debt Better For Bankruptcy?
Secured and unsecured debts are among the most common, and while many people think that there is little separating the different types of debt, they are wrong. In particular, unsecured debt can have numerous advantages over secured debt when you are considering bankruptcy. Secured debt is guaranteed with some form of collateral that you were asked to put up in order to obtain the credit that you were wanting. However, these debts can not easily be discharged during bankruptcy because the creditor will simply be allowed to collect the collateral.
As a result, you should understand that it will generally be simpler to have your unsecured debts discharged, and that you will probably lose any items that you had used as collateral to obtain secured lines of credit. While this can be an annoyance, it may be the only option for ridding yourself of the debt you need to reinvent your life with clear finances.
Should Only The Spouse With The Debt File For Bankruptcy?
A bankruptcy filing can have long-lasting consequences for your life. From troubles with getting financing to difficulty renting a place to live, the consequences of a divorce can be dire, but there are many married couples that are under the impression that only one spouse must file.
Marriage can be a wonderful way of committing to your loved one, but marriage will also merge your possessions, and this can make it impractical for only a single spouse to file for bankruptcy. While this bankruptcy protection will benefit the spouse that applied, it will do little good to file because the creditors will likely start actions against the spouse that did not file. Therefore, you and your spouse must file for bankruptcy at the same time to prevent this.
If you have found yourself in over your head when it comes to managing your debts, it is important to understand that you may have a way out of this particular problem through bankruptcy filings. Understanding the different ways that secured and unsecured debt are handled along with the importance of both spouses filing will make it easier for you to appreciate and utilize these protections.
To learn more, contact a bankruptcy attorney like Michael D Doyle Attorney at Law.