Unsecured debt is that type of debt that is not subject to any asset, that is, it does not have any guarantee. This debt is based on the fact that if it does not pay or cancel, the creditor will not be able to seize any property, only in such cases the debtor can be threatened, penalized or even legal action can be taken against him, but he cannot be stripped or taken from his property. Generally, unsecured debts are equivalent to higher interests than guaranteed ones, given the peculiarity that creditors do not have a specific guarantee in the event that the deficit does not cancel the debt.
It is important to mention that unsecured debts are completely different from guaranteed debts, because at the time that a guaranteed credit or loan is requested, the bank or creditor requires the applicant to give faith of some type of guarantee that will serve them as a guarantee in the event that it decides not to cancel its debt or is late in the corresponding payments, in this way the bank could seize the property or assets that are presented as collateral. Secured debts pose a greater risk, however the interest rate is much lower and the guarantor should not worry about whether the debtor meets the payments since he has a guarantee in return.
Individuals with numerous unsecured debts can seek advice from non-profit counselors; There are people who are in charge of advising debtors so that they are not affected and can cancel their debts in the best way, they can also inform about the different options regarding the consolidation and settlement of the debt. Most credit card debts are unsecured, so the guarantors send your delinquent accounts to various collection agencies in order to get your money back.
