We often get calls from prospecting clients asking us what the difference is between secured debt and unsecured debt, or even quasi debt and, “What is the debt relief process?”

I think it is a very fair question and worth taking the time to answer. Secured debt simply means that your debt is secured by something other than your signature. For example, your home is secured debt. The house acts as a “security’ to the bank or lender that should you no longer be able to make your payments, they can come and take or foreclosure on your house.

Another example of this would be your vehicles. They are secured by the vehicles themselves. Miss enough payments and the lender will have your vehicle repossessed.

Unsecured debt, on the other hand, is debt that you incurred with your signature. This could be credit cards, doctor or hospital bills, or personal loans you may have taken out from your bank or credit union. These are secured only by your signature. As a result, if you cannot make the payments on them, the creditor cannot come and take anything from you. This is unsecured debt and therefore negotiable with your creditors.

Finally, there is quasi unsecured debt. This is debt that you incurred, by taking advantage of special offers that retail stores make, such as “No interest and no payments until January 1, 2010 etc.” Let’s suppose you had your house carpeted or you purchased a new television under one of these agreements. The retailer certainly does not want their carpet back after you have used it for 9 months or television back either. This then turns your secured debt (carpet) into unsecured debt, which is negotiable as well.

For more information on how you can get help with your unsecured debt, simply click here, Getting Stated.