A secured debt is a debt in which the creditor maintains a security interest in an item or piece of personal property such as a house or an automobile. With secured debts, if you fall behind on payments, the lender can repossess the property that originally secured the debt. An additional drawback to secured debt is the fact that you may remain liable for the deficiency balance owing on the debt after your property has been repossessed and sold.
However, the laws regarding home mortgages vary from state to state. This means that a lender's debt recovery rights will depend on the terms of your mortgage and whether any other lenders also have an interest in the property.
Unsecured debt is debt in which you borrow from a creditor to obtain goods or services on credit in exchange for your promise to repay the debt. The primary difference between secured and unsecured debt is that unsecured debt is not collateralized by personal property.
Unsecured debt is commonly given in the form of credit card debt, commercial debt, medical debt, and personal loans. If you fall behind on an unsecured debt, lenders can take legal action against you, but more commonly will try to work out a reasonable debt settlement. It is possible for a secured debt to become an unsecured debt when the property that is securing the loan has already been repossessed and sold by the creditor.
Traditionally, if the sale of the property does not cover the full amount of the debt, it will result in a deficiency balance which is still the responsibility of the consumer. This deficiency balance is now considered an unsecured debt because no property is securing it. In many cases, this balance can be successfully resolved through a debt settlement program.
Alan Barnes
IAPDA Certified Debt Arbitrator and
President and CEO of Debt Regret
http://www.debtregret.com
article_text... Read More
article_text... Read More
article_text... Read More
article_text... Read More
article_text... Read More
article_text... Read More
article_text... Read More
You are swimming in debt... Read More
Are you the victim of a high interest rate auto loan? If so, the following email discussion may help you... Read More
Believe it or not, many people do not understand equity and the power it provides... Read More
Consolidating credit card debt is never easy... Read More
Are you feeling overburdened with debt? Are you paying out too much every month for your credit cards, store cards and loans? Then why not replace them all with one, lower, convenient repayment through a consolidation loan?Consolidation loans can give you a fresh start, allowing you to consolidate all of your loans into one - giving you one easy to manage payment, and in most cases, at a lower rate of interest... Read More
In our world of dizzying change, nothing is more true than the time honored statement that circumstances always change... Read More
One of the easiest "things" that can happen in life is the ratcheting up of a large credit card debt... Read More