The difference between secure and unsecured debt is critical for consumers to understand. Simply put "secured" means that the loan was made for something specific, like a house, car, or boat and the lender is listed on title and can take the property in case of default.
An unsecured debt is a debt where their is no collateral. Unsecured debts include medical bills, credit cards, department store cards, personal loans, collection accounts, student loans, amounts remaining after foreclosure or repossession, and bounced checks. Unsecured debt is successfully negotiated everyday by consumers competent debt settlement companies and attorneys.
Secured, collateralized debts, such as a home or automobile, should be a consumer's first priority if faced with juggling bills. If the creditor can simple repossess the property, there is little hope of them negotiating. Consumers can often renegotiate a short payment relief with a secured debt, but it is not recommended to attempt to settle the account while still in possession of the property.
