The Difference Between Secured Debt and Unsecured Debt

There are two different types of consumer debt. There is secured debt which is a loan that is guaranteed by specific collateral and there is unsecured debt which is not secured by specific collateral. It is important that consumers understand the differences between the two types of debt, especially if they are having trouble making their loan payments, because the different types of creditors have different rights when it comes to collecting money from you and they have different priority when it comes to bankruptcy proceedings.

Property That is Exempt From Bankruptcy

Historically, state law provided the property exemptions available to those seeking bankruptcy protection. However, the bankruptcy code now allows states to choose between the federal exemptions provided in the bankruptcy code or the exemptions provided in state law. Many states have chosen to continue to follow their state law exemptions but a minority of states have decided to adopt the federal exemptions instead.
Common Bankruptcy Exemptions
Some common types of property that are exempt from bankruptcy proceedings include: