Bankruptcy can sound like a rocky return to square one and a long road between you and good credit. But it does not have to be drastic. Your case may benefit best from a Chapter 13 restructuring instead of a reset. 

Let us cover a couple definitions: secured and unsecured debt. 

Secured debt 

This is debt of yours tied to collateral property. Mortgages on your home or a loan for a vehicle are good examples. If you cannot make these payments, collection agencies are in their right to seize them as payment. 

Unsecured debt 

This is debt you own based on your own creditworthiness. Debts like credit card bills, medical/hospital payments and utility bills all represent debt of yours that do not require collateral. The big recourse that collection agencies take in these situations, instead of seizing collateral, is taking you to court. 

Chapter 13 restructuring and reclassifying

With a Chapter 13 bankruptcy, there are a lot of legal hurdles to overcome (made easier with representation), but you can reorganize your life and make a plan to pay off your outstanding debts by restructuring how you pay it all off. 

You may even find options for reclassifying some of your debt from “secured” to “unsecured”. This can ease your debt stress by keeping your house or car off the table and keeping all your debt in one place under a single repayment plan. Many people can find relief by reclassifying a second mortgage on their homes. 

Find your feet, take back control and get a fresh start on your future if a Chapter 13 bankruptcy is right for you.