As individuals navigate different ways of filing for bankruptcy in North Carolina, they will commonly learn about different categories of debt. Debts are classified into a few different areas:
- Secured. Secured debt is paid back by property. A debtor who has “secured debt” may have to foreclose their house or sell a portion of their property to satisfy their debt. Another example would be vehicle repossession if a car loan is not paid.
- Unsecured. Unsecured debt occurs when the debtor promises to repay a sum of their debt, but they don't have property as collateral for the debt. Examples include credit card balances and medical bills.
- Priority. A priority debt is unsecured debt intended to be paid before any other debts.
- Administrative (part of Priority). This subcategory term is used when the debtor owes money to a party who has provided goods or services to the bankruptcy case after bankruptcy has been filed. For example, an administrative debt could be from the lawyer fees that must be paid back since the lawyer helped with your case.
The types of debts that will be paid off in bankruptcy will depend on the type of bankruptcy the individual files. Watch the video above to learn about creditor claims in discharged debts. Schedule a free consultation with one of our North Carolina bankruptcy attorneys to learn more. Call 877-BRENT-ADAMS or complete a case evaluation request.