The process of debt settlement begins by first understanding what types of debt you have, and how those debts fit into an overall debt management plan that your credit counselor will help you manage. Here is a quick summary of the differences between secured and unsecured debt, and the ways in which each can impact your assets as well as your financial health:
Secured debt is money that you have borrowed and put up collateral to secure it with. Lenders handle this form of debt by placing a lien on the asset.
As an example, mortgages, student loans, and car loans are the most common types of secured debt in America. Until such time as you pay these loans off, a lender could place a lien on these assets. You should note that when it comes to debt settlement, no third party vendor can easily settle this form of debt.
Unsecured debt is money that you have used without having to put collateral forth to obtain. The most common types of unsecured debt are credit cards, medical bills, utility bills, and personal loans.
If you do not make the required payments on unsecured debt, this information will first be reported to the credit reporting agencies (Experian, TransUnion, and Equifax). You may also be assessed late fees and penalties, if it isn’t handled in a timely fashion.
Superior Debt Services has been helping advising clients since 1998. Our certified debt counselors can help you negotiate with your creditors so that you can regain control and confidence over your finances. For more information about our services and how we can assist you, contact us by calling 866-896-7616.