Unsecured debts are any debts that do not pledge any collateral or property to guarantee payment. With unsecured debt, a creditors only recourse for getting payment in the event a consumer defaults on the terms is to pursue legal action, obtain a judgment, and then execute the judgment by garnishing wages, levying a bank account, or putting a lien on your property. Although this is not part of its formal definition, another feature of a truly unsecured debt is it can be discharged through personal bankruptcy. The most common unsecured, personal debt types are credit cards, personal or signature loans, deficiency balances from property repossessions, payday loans, and medical bills.
All I can find online are credit card debt relief organizations. What debt relief plans are available for secured debts?
Not many, unfortunately. Although there are some foreclosure debt assistance programs , generally the way to deal with secured debt is to contact the lender and ask for rate adjustments. Another popular method is refinancing your existing loans or finding a consolidation loan with better payment and interest rates.
I am not sure whether my personal debt is secured or not. How can I find out?
The first step is to talk to your lender. Many times they will tell you, but if you want to see for yourself, simply request to see the original contract. If this is not possible, you can also pull your credit report and see how the account is being reported. Many times it will show whether the debt is secured by collateral.
I have checked out three debt management corporations---Debt Relief of America, Debt Relief USA Inc & Freedom Debt Relief. Are they scams or frauds? Is there a place where I can find debt consolidation reviews or get information about any complaints? I also checked out Superior Debt Relief. Please help---I have an emergency and want this resolved asap.
The important thing is to do your homework before enrolling with any debt consolidation service. Another essential task is to compare your options. Although PayingPaul.Com cannot comment on any of the aforementioned companies, we can match you with a debt settlement or negotiation provider who we know is reputable. Simply fill out a form and you can start comparing your choices within the next 24 hours!
Do you suggest that I seek a non-profit debt relief agency?
Consumers have two options for dealing with their personal debts---debt settlement, also known as debt negotiation or debt reduction, and debt counseling. Most credit counseling agencies are nonprofit, but in many cases their monthly payment can be a lot more expensive than a for profit debt negotiation company’s. The reason why is credit counselors work to lower you interest rates, whereas a debt settlement organizations will try to reduce your balance. That means you save a lot more overall.
Do you suggest that I seek a local or national debt service?
When financial decisions are being made, ultimately a lot depends on how comfortable you feel with the company. If you feel more at ease with a local provider instead of a national one, then it is possible you will have a much better working relationship with that agency.
Why aren’t student loans considered unsecured?
There are two types of student loans---federal and private. Federal student loans are not subject to the same collection procedures that unsecured debts are in terms of filing a lawsuit, obtaining a judgment, and then finally being able to execute a judgment. Federal student loans can skip right to wage garnishment in the event the borrower defaults. In terms of private student loans, although they are subject to the same collections process as other unsecured debts, they are not dischargeable (or eliminated) through bankruptcy (unless approved by the court because you show paying it back would cause an undue hardship).