What is a secured debt?

A secured debt is a type of debt that is secured by collateral. This means that if the debtor fails to make payments on the debt, the creditor has the legal right to seize the collateral and keep it as payment for the debt. Examples of collateral are real estate, vehicles, equipment, stocks, or other valuable assets. In South Carolina, secured debt is regulated by Fair Debt Collection Practices Act (FDCPA), which is a law intended to protect consumers from unfair debt collection practices. Secured debt is different from unsecured debt, which does not require collateral. An example of unsecured debt is a credit card debt. It is important to note that even if someone takes out a secured debt, the debtor is still legally responsible for the debt. The difference is that if the debtor fails to pay, the creditor has the right to repossess the collateral to cover the cost of the debt. When taking out a secured debt in South Carolina, the debtor should be aware of their rights and obligations according to the FDCPA. The debtor should also make sure to read any contracts carefully in order to understand what is expected of them and the consequences in case of non-payment.

Related FAQs

What is validation of debt?
What is the Fair Debt Collection Practices Act?
What is a repossession?
What is credit card debt?
How does an unsecured creditor collect funds?
What is a cease and desist letter?
What is harassment or abuse by debt collectors?
What is a levy on wages?
What is an unsecured debt?
How do creditors enforce their rights?

What is a secured debt?

Related FAQs

Related Blog Posts