What is Unsecured Debt?
A loan which isn’t backed up by property or secured is considered to be unsecured debt. Essentially, no collateral has been given to the lender in the event that the borrower is unable to pay back the loan. Lenders can’t take a borrower’s assets until judgment has been rendered. When this happens, a lien is placed on the borrower’s property.
Types of Unsecured Debt Include:
- Most credit cards
- Student loans
- Rent or utility payments
- Medical bills
- Lawyer fees
- Court ordered child support
Why are Some Credit Cards Considered as Secure Debt?
Secured debt is backed by collateral. This type of debt can include home loans, auto loans, and personal loans. If you fail to pay the loan, the lender can confiscate your properties during the foreclosure process.
Prepaid credit cards or credit cards that are tied to a bank account are considered secure. If you fail to pay the amount on the card, the lender can take money from your bank account.
Get Help with Secured & Unsecured Debt in Dallas
You can find relief from overwhelming debt by contacting the our Dallas bankruptcy attorneys at Engel Law Firm. Our staff is familiar with Chapter 13 bankruptcy and Chapter 7 bankruptcy, along with other alternatives that are available to consumers in the state of Texas.
It’s time to get debt free. It’s time to contact the Engel Law Firm.