Bookmark
E-mail
Printer friendlyFrequently asked questions
Q. Why is Mark Silverthorn assisting consumers after working for collection agencies for 12 years?
Q. How can Mark Silverthorn help stop collection agencies from calling me?
Q. When can a collection agency disclose the existence of my debt to someone other than me?
Q. Under what circumstances can a collection agency leave a message requesting a return call?
Q. What is a judgment and what is its significance?
Q. What is the difference between secured and unsecured debt?
Q. For what type of debt can Mark Silverthorn provide the most assistance?
Q. Is it possible to avoid paying a debt due to the passage of time?
Q. Why might my financial situation not be as bleak as it appears?
Q. Personal bankruptcy: How much does it cost and what are its consequences?
Q. What can I do if I want to fight back and make things uncomfortable for a collection agency?
Q.What is the difference between secured and unsecured debt?
A.There are two types of debt; secured debt and unsecured debt. The difference between these two types of debt is important for two reasons. Firstly, it is much more difficult for a creditor to recover an unsecured debt. Secondly, filing for personal bankruptcy does not eliminate a bankrupt's secured debts.
Secured Debts
Secured debts are debts where the creditor can recover some collateral in the event of a debtor's non-payment. The debt is said to be secured because of the creditor's right to the collateral in the event of default. The most common secured debts in Canada are mortgages on homes and car loans financing the purchase of an automobile. Homeowners who borrow money and take out a mortgage provide the lender with a security interest that attaches to their home. In most instances where a person finances the purchase of an automobile the lender registers a lien against the car.
Unsecured Debts
Unsecured debts are debts in which the creditor has no collateral to satisfy a debt in the event of a default. Virtually all credit card debt is unsecured debt. Many personal loans and lines of credit, particularly for smaller amounts, are unsecured debt. Student loans and income taxes are unsecured debt. Monies owing to utility companies for telephone, water, hydro, internet, and cable service are unsecured debt.
Certain types of debt may be secured or unsecured
Certain types of debt may be secured or unsecured depending on whether or not the creditor has a right to collateral in the event of default. Personal loans, lines of credit, and bank overdrafts may be secured or unsecured debt. A few of the credit cards available today provide the creditor with collateral and are therefore secured debt.
One of the trends today is for financial institutions to extend a significant amount of credit to a consumer under a master credit agreement: extending credit for credit cards, lines of credit, and the financing for the purchase of a home, all secured by a mortgage on the consumer’s home.