What Is The Difference Between Secured And Unsecured Debt?
Don’t be misled by credit card consolidation and debt consolidation programs that often just don’t work. It is wise to seek experienced counsel who can answer your questions honestly and promptly.
At Rauser & Associates Legal Clinic LLP, our attorneys are often called upon to explain the legal concept of secured versus unsecured debt in Ohio. When going through the bankruptcy process alone, individuals can quickly become frustrated at the different rules and regulations that are in place. We are here to provide the support and guidance you need.
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Most clients are afraid of losing their house and/or car. Through the bankruptcy process, our attorneys help most clients protect their property, even lowering balances and payments in some cases.
Secured debt versus unsecured debt is a central concept in most bankruptcies. People want to know as early as possible which debt will be eliminated and which debt will require repayment. Every situation is different, but the main differences are these:
- Secured debt is tied to an asset that can be considered collateral. A lender can place a lien on the asset and attempt to recover it in the event that payments are not made. Auto loans and home mortgages are the most common form of secured debt. Arrearages can be cured through bankruptcy (through Chapter 13, redemption or reaffirmation).
- Unsecured debt is not tied to collateral. In this situation, if you fall behind on payments, the lender has no right to seize any assets or property. The lender might pursue alternative means of collecting the debt such as wage garnishment or bank account levies. The most common forms of unsecured debt include credit card debt and medical bills.
Our experienced and caring attorneys and staff understand that every client is different. That is why we take the time to carefully evaluate your financial situation and provide the insight you need. Trust our experience and knowledge of bankruptcy law to help you. If you need legal guidance for consumer debt issues, contact a lawyer at Rauser & Associates Legal Clinic LLP today.
If you have further questions or concerns regarding secured loans versus unsecured loans or about other financial issues, contact any of our convenient Ohio offices by calling 888-843-5787. Offices in Columbus, Cleveland, Akron, Youngstown, Canton and throughout Ohio.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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