Types of Debt
If you would like to enroll in our debt consolidation care program, you will need to have unsecured debt. Learn more about the difference between unsecured and secured debt here.
Unsecured Debt
Simply put, unsecured debt is debt that is not tied to a piece of your property. In other words, it is a loan that does not require collateral. With unsecured debts, creditors cannot seize any property if you fall behind on your payments. However, you are still legally obligated to pay such debts. If you fail to do so, the creditor can obtain a judgment against you to garnish your wages. In order to enroll in debt consolidation care, you must have at least $5,000 in unsecured debt.
Types of Unsecured Debt
To give you a better idea of what unsecured debt is, we've listed some common examples below. Any of the following debts will qualify for debt consolidation care:
- Credit cards
- Student loans
- Personal loans without collateral
- Debt consolidation loans not secured against your home
- Medical bills
- Old phone or utility bills where the line/account is no longer active
Secured Debt
Secured debt is debt that has a claim on some piece of property or physical item that belongs to you. Such debts might be secured against a home, car, boat, or other item. With secured debts, if you fail to make your payments, your creditor has a legal right to seize or repossess the collateral against which the loan was secured. For example, if you fall behind on your car payments, your creditor can repossess the vehicle. We do not offer debt consolidation care for secured debts because creditors are generally unwilling to compromise on interest rates when they could instead seize property. Here are some common examples of secured debts that would not qualify for debt consolidation care:
- Home mortgage loan
- Car loan
- Personal loan with collateral attached
- Home equity loan
- Debt consolidation loan secured against your home
If you have any questions, please check out our FAQ page.
