Examples of Unsecured Debt and Consequences of Not Repaying

Unsecured Debt pic
Unsecured Debt
Image: nssfl.com

Founder of The Loan Corporation, Harry Hedaya possesses expertise in retail residential loans. Additionally, Harry Hedaya specializes in debt resolution and leads a prominent unsecured debt resolution company in Florida.

When a person applies and receives approval for a loan that requires no collateral, he or she accrues unsecured debt once they use the funds. Student loans, medical expenses, and utility bills are common forms of unsecured debt. Other types include back rent and income taxes as well as department store credit cards and court judgments that have not progressed to the point of wage garnishments.

Though collateral such as a personal residence or vehicle cannot be repossessed if the borrower fails to fulfill their financial responsibilities, the contractual agreement stipulates that delinquent payments may be reported to credit bureaus. In more severe cases, a creditor can file a lawsuit to recover money. If a judgment is approved, a borrower can expect a creditor to receive access to personal income information to determine what bank accounts and wages will be garnished to recoup funds. A borrower at risk of a judgment or in need of unsecured debt resolution should contact qualified professionals to help remedy the issue.