In this article I will discuss the different types of unsecured debt. Unsecured debt is debt that does not have collateral attached to it. Collateral for example. could be a house or car, or any other type of physical property that can be repossessed if the payment agreement is not withheld. If you do not pay on your unsecured debt, property cannot be seized without the debtor first obtaining a court judgement against you. There are a few exceptions to this rule, contact us to speak about any exemptions to unsecured debt, or pay attention to the next article where we will discuss this topic. Unsecured debt differs from secured debt in that, secured debt will have a piece of property acting as collateral for the debt. With secured debt, if you do not make your payments as agreed, the property can be seized by the creditor.
Types of Unsecured Debt
There are many types of unsecured debt, here are just a few examples; i.e., credit cards, medical bills, signature loans, informal agreements, installment payment agreements without a valid security agreement, etc. These forms of debt can be discharged completely (wiped out). There are other forms of unsecured debt that can be identified when we speak. This means that when filing for bankruptcy there is not specific property tied to these types of debt, so the debt can be erased. There are several exceptions to this rule, and that will be discussed in our next article. The major exceptions will be set forth as follows, in our next article, however, if you have any particular concerns, be sure to bring it to the attention of the attorney you speak to.
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By: Joel S. Treuhaft, Esquire