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Common Debt Collection Questions
How do I collect debt?
While you did your end of the deal the borrower may not have done theirs. First, it may be beneficial to send a simple demand letter restating the terms of the loan in case the borrower simply forgot. If the debt remains you might consider mediation or a collection agency. Finally, if all else fails you may be forced to contact an attorney, file suit, and go to court.
What’s the difference between secured debt and unsecured debt?
Secured and unsecured debt are the most common types of debt. WIth secured debt, the borrower has put some form of property up as collateral for the loan--in the event the borrower cannot pay his debt the lender can take possession of the collateral. Conversely, with an unsecured debt the lender cannot repossess assets and must seek other means of payment.
What is debt consolidation?
If you have more loans than you can keep track of debt consolidation puts them in one place. Debt consolidation is the act of taking out a single loan to pay off other loans and it has some important advantages and pitfalls. While consolidating your debt may secure you a lower interest rate the debt is still there. Furthermore, if the consolidated loan is a secured loan you risk losing the collateral attached to it. As with any loan, be absolutely sure it’s a good deal for you.
How do debt collectors work?
If you’re owed money and simply can’t get back, you might want to think about contacting a debt collection agency. Generally, an agency will buy a debt from you at a reduced rate and deal with the debtor themselves. Once you do this, you will no longer be able to collect on the debt.
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