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What are Secured and Unsecured Claims in Bankruptcy?

One important factor to consider when filing for bankruptcy protection is whether the claims that creditors hold against you are secured or unsecured claims. According to the Bankruptcy Code, a claim is a “right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable or secured.” In other words, a claim in terms of bankruptcy includes almost any right to payment that a creditor might have against a debtor. In a typical Oklahoma bankruptcy case, claims may include credit card debt, medical bills, car loans, mortgages, tax debts and more. If you think filing for bankruptcy in Oklahoma might be a good option for you, contact our experienced bankruptcy attorneys at Oklahoma Legal Center to discuss the specifics of Oklahoma bankruptcy protection and what steps you can take to improve your financial situation.

Unsecured Claim

According to Oklahoma bankruptcy laws, an unsecured claim describes a situation in which a creditor has no judicial, consensual or statutory lien on property securing the repayment of the debt. This type of claim can also occur when a creditor does have a lien on the debtor’s property, but the value of the property is less than the amount of the creditor’s claim. An example of an unsecured claim would be if a consumer spends $600 on his Visa card and then files for Oklahoma bankruptcy. If at the time the consumer files for bankruptcy in Oklahoma he or she still owes Visa that $600, Visa has an unsecured claim for $600.

Another example of an unsecured claim would be if a consumer borrows $130,000 from the bank, granting the bank a mortgage on his or her home, and then files for bankruptcy. If at the time the consumer files for bankruptcy he or she owes the bank $120,000, but the home is only worth $100,000, the bank would have an unsecured claim for $20,000.

Secured Claim

In Oklahoma, like in any other state, a secured claim in a bankruptcy case is a claim on which the creditor holds a lien, or has a right to sell off, against property included in the bankruptcy estate, which secures repayment of the consumer’s debt. An example of a secured claim would be if a consumer borrows money from the bank ($100,000) and grants the bank a mortgage on his or her home. When that consumer files for bankruptcy in Oklahoma, if the value of his or her home ($120,000) is more than what he or she owes the bank ($100,000), the bank would be considered a secured creditor with a secured claim worth the original amount owed ($100,000).

Contact our Bankruptcy Attorneys for Legal Help

How your debts are handled during bankruptcy proceedings in Oklahoma depends on a number of factors, including what chapter of bankruptcy you filed under (Chapter 7 or Chapter 13) and whether the debts are considered secured or unsecured. For this reason and others, it is extremely important to enlist the help of a qualified bankruptcy attorney when filing for bankruptcy in Oklahoma, to ensure that your debts are handled properly. If you are considering filing for Oklahoma bankruptcy, contact our skilled bankruptcy lawyers at Oklahoma Legal Center to discuss your financial options under Oklahoma bankruptcy laws. With our bankruptcy attorneys on your side, you can work to have your debts discharged or reorganized into a manageable repayment plan, in order to start fresh or gradually pay back your creditors over time.

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