Types Of Debt - Unsecured Debt
The type of debt is one of the defining factors in how the collection agency collects it. When we talk about debt we are talking about four major catagories.
- Unsecured Debt
- Secured Debt
- Tax Debt
- Judgements
The rights of the debtor AND of the collector are different with each. It also depends a lot on whether the debt was incurred for business or personal use.
An unsecured debt involves nothing but a promise to pay. Credit cards, IOU’s and a “smile and a handshake” all constitute unsecured debt. These are often referred to as “open accounts”. Your utilities and garbage bill are also examples of this type of transaction.
While possession and ownership of the item purchased does belong to the buyer, the seller or creditor retains nothing more than the right to use court action in the even of default. The court action can force the buyer to pay, or return the merchandise.
Sometimes debts are wrongful. The merchandise is faulty or was just not what you expected or wanted. Since you have made a promise to pay, you still owe the money. As in the case of most transactions the rule of the day is “let the buyer beware”.
Even though there are unscrupulous creditors out there, you must accept responsibility for your debt situation. You were not tortured into submission. You willingly accepted the debt. I’m sorry for being so blunt here, but its just the way it is. I’m glad your dealing with the situation now.
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