If you are considering filing bankruptcy, you are probably concerned about what types of debt you may be entitled to eliminate, as well as how much debt you can make disappear. This is a common and legitimate concern. After all, if you are saddled with just as much debt after bankruptcy than before it, or if your standard of living is markedly worse than before bankruptcy, perhaps it may not the best option for you.

Part of the help that you would need in deciding whether to seek bankruptcy protection is understanding the different types of debt and how they are classified under the bankruptcy code. Essentially, there are two categories: “secured debts” and “unsecured debts.”

A secured debt is a financial obligation that is attached or “secured to” a specific asset. Examples of secured debt include, cars, homes, boats, and in some instances, jewelry. If you fall behind on your payments on secured debts, a creditor can ask to take back the property.

Conversely, unsecured debt is debt that is not attached to any item. It is also called service debt, as it comes from credit card debt, medical debt and other obligations that are not attached to a piece of property.

So if your debts are comprised primarily of unsecured debt, it would be helpful to discuss your situation with an experienced bankruptcy attorney. Chances are that a Chapter 7 bankruptcy may be in your best interests. If much of your debt is tied up into property, it may be that Chapter 13 would work best for you.

The preceding is not legal advice.