Unsecured Debt
Unsecured Debt is where the lender has taken no security against the loan or credit amount, and falls into different categories.
The first category is household bills; gas, electricity, water, telephone, cable, etc. If you do not pay these bills, the supplier will cut you off, and seek any amount that is still owed.
The second category is known as consumer debt; bank loans, credit and store cards, store credit (e.g. buy now pay later), catalogues, etc. If you do not pay these bills, you will probably suffer pressure from your creditors. Some creditors can be very aggressive in their collections strategies.
The third category we call collectable debts; these would typically be loans arranged through independent loan companies who call on a weekly basis to collect their money. Money owed to debt collection companies also fall into this category and usually attract interest at higher rates.
The final category is of debts owed to family and friends, or business debts such as Income Tax, National Insurance, VAT etc. With these creditors, especially government creditors, your options are very limited.
If you break the terms of any lending agreement, and the debt is over £750, creditors can apply for a court order to have you bankrupted. This applies to all creditors, be they loan companies or government agencies.
This list is not exhaustive, there are many other forms of debt; but however many forms of debt there are, you can be assured that it all mounts up. Sometimes personal debt can climb to a point where it escalates beyond your control. At this point, it is advisable to have an experienced debt counsellor assist you with your financial matters. Contact us using the form above for a no obligation discussion on how to best manage your debt problems.