If I don’t make payments, will the creditors come take away my personal belongings?
Failing to pay your debts can definitely bring negative consequences. The crucial element in the severity of the consequences is the particular kind of debt or missed payment. For example, consequences from failing to pay a car loan or your mortgage will often differ from failing to pay credit card debt. Court ordered payments, like child support or alimony, also have their own set of repercussions for failure to pay; which, in severe cases, can even include jail time.
To understand your rights when it comes to falling into extreme debt, you need to understand the difference between Secure and Unsecured Debts.
When you agree to a loan, or line of credit, your creditor may or may not include collateral as a form of protection against the loan. Including collateral is known as a secure debt, as the creditor is “secure” in getting their money back. Common examples of secure debts are car loans, home mortgages, boat loans, large business equipment, etc. In a secure debt, the creditor is well within their rights to repossess or foreclosure on your car, home, boat, etc. in order to recoup the money owed after failure to pay the loan.
In an Unsecured Debt, the creditor or lender had no collateral on the money borrowed. These creditors have no right to your possessions without taking legal action. In order to demand payment or possessions/property in place of payment, unsecured creditors will have to file a lawsuit and win a judgment against you. Until then, an unsecured creditor has no right to come after your possessions in place of repayment. Unsecured debts typically include credit card payments, large business expenses, rent, or fees for services.
When facing overwhelming debt, it’s important to discuss your options with an experienced debt settlement attorney as early on as possible. Our team would be happy to sit down with you to discuss your specific situation at length. Contact our office today to set up a consultation by phone or in-person. Our office can be reached at (702) 998-1188, email@example.com, or via our online appointment scheduler.
For more information on this and other bankruptcy and debt settlement topics, check out our Bankruptcy Law Blog, or Bankruptcy Law TV playlist on Youtube.