Being in debt means that a person owes money. The person owing the money is the debtor, and the person owed money is the creditor. In some cases, Debt Help in Topeka KS can involve assets such as interest in real property.
Different Debt Types
Debt is grouped into two categories: corporate and consumer debt. Most people are aware of consumer debt, which consists of debts incurred in the payment of living expenses. Some of the most common types of consumer debt include:
Home loans. For most, this is the largest source of debt. Considering the housing crisis, many people have debt far beyond what they can afford to pay.
Credit card debts. Overspending and high interest rates can lead to severe credit card debt.
Student loans. Educational debt cannot be discharged in bankruptcy, and they remain a prevailing expense.
Bank loans. These are commonly used for large, one-time purchases, but they typically involve extended repayment plans.
Corporations may also incur debt. These debts can include that which is traded on the public market, and that held by private companies. Syndicated debts are those where multiple lenders work together to provide a loan to a corporation.
Legal Consequences of Debt
Dealing with debt’s consequences depends on whether the debt is unsecured or secured. A secured debt means that a creditor can seize a debtor’s assets if they cannot repay the loan. In these cases, the loan is secured by an asset such as a car or home. Unsecured debt doesn’t involve property used as security, and creditors must use other ways to collect what they’re owed.
Laws Providing Protection to Debtors
Most jurisdictions have laws in place to protect debtors from unfair treatment by creditors. According to Federal law, the Fair Debt Collection Practices Act governs how creditors can collect money from debtors. For instance, creditors may not call at certain times, and they cannot make threats to force debtors to pay.
Hiring an Attorney
It can be challenging to deal with creditors, and there are numerous deadlines to meet. It is often to the debtor’s advantage to hire an attorney for Debt Help in Topeka KS, especially if they must deal with unsecured debts. By hiring an attorney, the debtor can Click here to ensure that their debts are paid in a fair, timely manner.
