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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31662
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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Tell me about unsecured debt. What option does a credit card

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Tell me about unsecured debt. What option does a credit card company have if I fail to pay the debt?
Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney here to assist you.

I'd you file bankruptcy, unsecured creditors have virtually no options because there's no collateral securing the debt. If this happens, the unsecured creditors will only be able to collect if you have lien-free property/assets that can be liquidated.

If you don't file bankruptcy, the creditor can sue you for the amount owed, and once a judgment is received, the creditor can garnish your wages, freeze your bank accounts, seize property, etc. to generate money to pay off the debt.
Customer: replied 5 years ago.
So it would seem unsecured debt is not unsecured debt since in the long run the debt is secured by any assets a person has. Is this what you are advising me?
It is unsecured because there's no collateral specifically tied to the debt. Instead, if there's a default, the creditor can't go pick up your car or foreclose on your house because there's no lien on that property.

Instead, the creditor is left with having to sue and take a judgment. Once it receives a judgment, the creditor becomes a judgment creditor and can pursue you as described above. The creditor is unsecured unless it can collect through one of these avenues.
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