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Home English FAQs Collections-Creditors Rights New Jersey

When Does A Secured Debt Become An Unsecured Debt?

A secured debt may become an unsecured debt in situations where the property securing the loan has already been repossessed and sold by the creditor. If the sale of the property does not cover the contractual obligation, the consumer owes a deficiency balance. This deficiency balance then becomes an unsecured debt. Certain exceptions may apply and will depend on the exact nature of the security interest.

Other New Jersey Collections-Creditors Rights FAQs

Q: What Is Secured Debt?
A: A Secured Debt is a loan where the creditor retains a security interest in an item of real or personal property such as a house or an automobile. If you fall behind on … More
Q: What Is An Unsecured Debt?
A: An Unsecured Debt generally arises out of a contract you enter into with a creditor that enables you to obtain goods or services on credit in exchange for your promise … More
Q: Do The Debt Consolidation Procedures Work With Every Creditor?
A: No program works 100% for everyone, and of course no firm can guarantee results in advance.
Q: Can A Creditor Add Interest To A Debt?
A: Yes. The FDCPA allows a creditor to add interest if the original agreement calls for the addition of interest during collection proceedings or the addition of such … More