Difference Between Secured and Unsecured Debts

A creditor who does not hold security (such as a mortgage or vehicles) for money owed. Your mortgage loan is secured by your home. Similarly, your auto loan is secured by your vehicle.

A lender has the right to take the asset if you fall behind on your payments. If the lender has to take your asset because of you’ve become offending, the asset will be sold. If the selling price for the asset doesn’t completely cover the debt, the lender may pursue you for the difference.

     With unsecured debts, lenders don’t have rights to any collateral for the debt. If you fall behind on your payments, they don’t have the right to take any of your assets. However, the lender may take other actions to get you to pay. For example, they will hire a debt collector to coax you to pay the debt. If that doesn’t work, the lender may sue you and ask the court to garnish your wages, take an asset, or put a lien on another your assets until you’ve paid your debt.

Credit card debt is the most widely-held unsecured debt. Other unsecured debts include student loans, medical bills, and court-ordered child support.

 You can ask for free debt advice from our expert to manage your debts.

3 thoughts on “Difference Between Secured and Unsecured Debts

  1. Hey! I have debt around £16000 and I am struggling to pay it. I do job in call center and make £1700 per month. After paying rent, other bills and monthly expenses there is no amount left to pay my credit card debt. I am 4 month behind the payments and now credit card companies passed my case to their debt collector and they are calling me numerous times and I am upset by chasing by them every time. Please help me and let me know how to stop calls from their debt collector team and wipe out these debt, I can pay monthly £250-£300 to paid off my credit card debts. I am looking forward for your help.

  2. Hi, Sorry to hear about your situation!
    But don’t worry! Debt management program is an answer for your problem. I will not advising you to go for another loan to pay off your credit card debts as I think you have very little disposable income left and another loan can create a worst situation for you.
    When you go for Debt management program then on your behalf our adviser will negotiate with your debt companies and set a minimum repay structure according to your disposable income. Once you start Debt management all recovery calls will be stopped.
    You can request here for debt management program or further a free debt advice!

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