Secured vs. Unsecured Debt
Secured and Unsecured Debt Attorney in Portland, Oregon
When a person declares bankruptcy, one of the options to settle for the unpaid loan is to choose which one to prioritize clearing first – the secured or unsecured debt. Because those two are different and have different statutes, seeking the advice of an reliable secured and unsecured debt attorney in Oregon is the best way to handle the situation.
Your debt attorney will help you plan and give you the best professional assistance needed for the problem.
Although declaring and filing for bankruptcy should be the last resort, considering different bankruptcy alternatives is a good start. If you’re having trouble with debts and need a professional secured and unsecured debt attorney in Portland, Oregon, you can book a schedule now to start on your debt relief journey. Our experts and experienced attorneys will carefully assess your debt situation and lay down all the debt alternative options.
However, if you’re in a debt situation, understanding the secured and unsecured loans can help you improve your financial literacy. It can even help you make wise decisions for better financial health and stability in the long term. By working with an expert in secured and unsecured debt attorney in Portland, Oregon, you can better assess the situation and clear all your debt problems smartly.
To start, we should first discuss the difference between secured and unsecured debt. Which one should you prioritize paying first, and which one is the best form of debt according to your situation.
What is Secured Debt?
A secured debt is a form of debt backed by the debtor’s property, such as a house or car used as collateral.
A secured debt is almost always secured or created with liens. This means that when a debtor enters in secured debt, they give the creditors a right to seize their provided property. The creditors can only take the property when the debtor cannot fulfill or pay the credit based on the agreed specified time frame. There are also two types of lien – a voluntary and involuntary lien. By working with an experienced Portland secured and unsecured debt attorney, they can help you clearly understand how the lien and other types of debt can affect you, as well how you can strip the lien in your property.
With a voluntary lien, the debtor is consensually approving or granting the creditor a legal right to the property as a form of security to repay the debt. A perfected lien provides a document or proof that a creditor has a legal right over the collateral items. The perfecting of a lien is a mandatory action to give the creditor authority – which applies to different state laws and collateralized property types.
On the other hand, the involuntary lien is almost always done by the state or bankruptcy court. This often happens when the court gives a legal body the right to seize or confiscate the debtor’s property if the debt is left unpaid. These liens include income tax, real estate, judgment, or landlord liens.
Advantages and Disadvantages of a Secured Debt
Most secured debts or loans are common ways to borrow large amounts of money, services, or items. Most secured loans have lower rates, higher borrowing limits or capacity, and even longer repayment terms because of the collateral.
- Lower rates
- Higher borrowing limits or capacity
- Longer and better repayment terms because of the collateral
Because of the security from the creditor’s point-of-view, secured loans can benefit the debtor who needs an urgent high amount of money. When you secured a loan – this mostly means that you’re providing security that the debt will be repaid – or else risk losing the property.
When the creditor seizes the assets or collateralized items – they sell them at the highest possible price – which is used as the debtor’s indirect payment on the debt. Getting back on the sold items or property is almost always impossible.
Types of Secured Debt
Home Equity Loan
A home equity loan is a type of loan that allows borrowing money in exchange for the debtor’s home equity as collateral.
A car loan is a type of secured debt because the creditor automatically uses the brand new car loan as collateral if the debtor did not pay on the agreed payment schedule.
A mortgage is a type of secured debt used to pay for a house. The monthly mortgage usually involves principal and interest – alongside the insurance and taxes.
An auto loan is a financing option or debt you can obtain, usually through a dealer, your bank, or a credit union.
What is Unsecured Debt?
Unsecured debt is the polar opposite of secured debt. This is a type of loan or credit that has no collateral or legal properties securing the debt. This type of loan gives the creditor lesser security over the credit. In unsecured debt – the creditor or lender doesn’t have any legal rights to confiscate the debtors’ personal property if they default on the payment terms.
Due to a lack of security on the creditor’s part, unsecured debts always give a very high interest rate. Debtors almost take this type of loan with a minimal credit history and bad credit. It is also for debtors who don’t have enough assets to use as collateral to enter a secured debt.
Advantages and Disadvantages of a Unsecured Debt
Because of the risk on the creditor’s part – most unsecured debts have higher interest rates because of the lack of collateral. They also give minimal payment terms for debtors, which can be pretty restrictive. An advantage to being considered on unsecured debts or loans is the easy access to the loans. Mostly, you can take the money immediately for emergency needs such as medical bills or need last-minute flights.
Types of Unsecured Debt
Credit Card Debt
Some credit cards don’t require collateral, and they can be a form of unsecured debt. A credit card is a type of loan in which the debtor borrows money from the bank to make a purchase. A credit card loan has to be paid at a later date.
Students loans are for students who need help paying educational expenses such as tuition, books, school or educational supplies, and living expenses.
Medical loans are payment for high medical bills.
Personal loans for personal expenses such as utility bills, mortgage, or home improvement loans.
If you’re dealing with unsurmountable debt and you want them discharged, our Portland debt attorneys can help. Bankruptcy can be a confusing and stressful process. We are here to help by providing the service of a bankruptcy and debt attorney who will explain the process, answer your questions, and walk you through the paperwork. We provide exceptional service, taking the hard out of bankruptcy whether you’re dealing with secured or unsecured debt.
Consult a Secured and Unsecured Debt Attorney in Portland Today!
Secured and unsecured debts vary from one another in terms of the payment terms creditor can impose. Choosing whether to enter on secure and unsecured loans also highly depends on the debtor’s financial situation. Knowing which one to choose can lead to a more healthy economic life and a better credit score.
If you are on debt and looking for debt relief, seeking professional help from a secured and unsecured debt attorney from Portland, Oregon, will provide insights on which debt you should prioritize first. The risk of losing your property or the continuously increasing unpaid loan and interest from the creditor can result in a lawsuit.
Your secured and unsecured debt attorney can help you classify assets as secured or unsecured. Under unsecured debt, creditors must file a lawsuit in bankruptcy court first before they are authorized to seize the debtor’s assets and property as collateral.
In a similar situation, you can book a free consultation with our Oregon debt attorneys. If you are from Bend, Clackamas, Portland, and surrounding communities in Oregon that need debt relief, bankruptcy alternatives, or even legal support against unlawful seizing properties, our bankruptcy, and debt attorneys can help. We at Michael D. O’Brien and Associates guarantee your utmost confidentiality in your case and situation. Schedule a consultation with out Portland bankruptcy law firm today!