A type of debt secured by collateral to decrease the danger associated with lending like a mortgage. A pledge is also a good example of secured debt.
Chapter 7 is one of the famous bankruptcy used by individuals. In this bankruptcy trustee is appointed for selling the assets. In chapter 13, individual have steady source of income. In this debtor must settle his debts over a three to five year period. These are used by small businesses. There is no time limit for this filings.
A debt which is used to reduce the risk associated with lending and it provide the security to lenders. Mortgages is the example of secured debt.
The first is in which a person has a source of income and he can keep his property. But he has limitations on his debt in 3 to 5 year. The second is in which assets of debtor are liquidated and debt is also vanished with this liquidation.
Preferential payment and fraudulent transfer are the two types of actions that are prohibited. A debtor transfers his assets to any creditor shortly in preferential payment. An effort to avoid debt by transferring money to another person is called fraudulent transfer.