Secured vs. Unsecured Debts

There are different types of financing methods, but basically, there are two types of loans that a consumer can take. One is the secured debt, and the second is the unsecured debts. It is vital to understand the difference between the two while borrowing the money and to plan the repayment. So here in this article, you will get to know what these two are and also about the benefits of hiring debt settlement attorneys.

Secured debts 
Secured debts are those in which the borrowers keep their assets as security. While placing your assets as security, you give the rights to the lender to seize your assets, when failed to repay the debt amount. Further, the assets can be sealed and sold by auction process to generate the amount of money that you owe to the lender. And, by chance, if the asset is not sold at the debt amount i.e. sold at a lower price, then the balance is levied on the borrower. A debt settlement attorney can be of great help to let you know all the formalities and rules governing the same.

Unsecured debts
In unsecured debts, you do not have to keep your assets as security, and lenders do not have a right to ask for any collateral. Even if you fail to make the debt repayments, they cannot put a claim on your assets and property. Though there are other actions that they can take to get their money back, they cannot come and simply seize your property. They may hire people to pressurize you to pay your debts or may take you to court for your inability to pay the debts by seeking assistance from a foreclosure attorney in Los Angeles or any other place for that matter. Also, they let your payment status known to credit bureaus which will further spoil your credit score.

How attorneys can help you in such a condition?
Debt attorneys can be of great help when you are facing such an issue with debt repayments. Hiring them can assure you of having someone besides you who can take care of your debt settlement issues and play your part in handling your creditors. Here are a few advantages of hiring them:

• You don’t have to explain yourself to your creditors. It’s not that they forget your debts but because the attorney will handle all the calls from lenders with their expertise and knowledge.
• You stop getting phone calls from your creditors. You get some mental peace when you have someone besides to guide you and help you cope with such a state of turmoil.
• The attorneys can also earn you some negotiation with your creditors due to their contacts and expertise in this field.
• When your creditor takes you to court to sue you, then a debt settlement lawyer can be of great help and may guide you during the legal proceedings.
• They can help you deal with the situation. If you are not in a condition to make the repayments, then they can also help you in filing for bankruptcy. You would be surprised how a bankruptcy lawyer handles bankruptcy and improves his client’s financial situation with his skills and expertise.

So now you must have clearly understood the difference between the two kinds of debts. Which type of debt to take solely relies on you, but if you happen to get stuck in making the repayments, then walking to a bankruptcy law firm can be your best bet. Find the best foreclosure and debt lawyer near you who can guide you in all aspects to let you have a new start.