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Differences between Secured and Unsecured Debt
If you are one of the thousands of people in the United States who are struggling to pay back their debts, you should research and educate yourself on the various aspects of debt relief and management before taking action. For instance, before you jump to find a solution, you should analyze your financial state and determine what type of debt you are struggling with most. The two types of debt that you should know about are secured and unsecured debt.
Secured debt refers to any debt that is directly linked to some form of collateral. Examples of loans that are classified as secured debts include mortgages, car loans or home equity loans. It should be your priority to make payments for secured debts first when you arrange your budget, because if you default on your payments the creditor can take away your collateral. Secured debts can only be eliminated by one of two ways: either you pay the loan off or the bank will take back your house, car, etc, in lieu of a payment.
Loans without any collateral associated with them are unsecured debts. They are “unsecured” because there is nothing that guarantees the creditor that the loan will in fact be paid. After all if you don’t pay your credit card or student loan, it’s not as though the creditor is able to take away the dinner you ate or the diploma you earned. Because there is no collateral, in times when your budget is crunched, it may be necessary to let the payments on unsecured debts slide so that you can pay your secured debt. Although this is not an ideal method of money management, it is exactly what many people have had to do in order to hold on to their property during these trying economic times. This is one of the many contributing factors as to why Americans today have significant amounts of unsecured debt.
Debt Settlement Eliminates Unsecured Debt
The only way to eliminate secured debt is to pay it off or forfeit your property. However, if you have considerable unsecured debt, you have more options available to you for debt resolution. You can completely erase your unsecured debt through a process known as credit card debt settlement. Our debt settlement program begins by filling out our no obligation debt settlement form, so we can show you how we can eliminate your debt in 12 to 36 months.
When you enroll in our debt settlement program, your personal debt settlement coach will analyze your finances and come up with a practical budget for you to follow. Instead of paying multiple creditors, you will pay one low monthly payment towards your settlement. One of our debt settlement experts will work with your creditors to reach an agreement that enables you to pay off the loan for a lump sum that is 50% or less than what you actually owe.
Although our debt settlement program only deals directly with unsecured debts, the process of debt settlement can indirectly aid you with your secured debts as well. Our lower payment plan frees up your budget and makes paying that mortgage or car loan that much easier. And of course the end result of our debt settlement program, being completely credit card debt relief, is certainly helpful in terms of your budget and money management in general.
If you are struggling with your unsecured debts please take a moment to Fill out our free, no obligation debt settlement form. Let us show you the best way to become debt free.
Offering Professional Debt Settlement Help to 50 US States
List of States where we offer debt settlement
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