A secured debt is a debt in which the creditor maintains a security interest in an item or piece of personal property such as a house or an automobile. With secured debts, if you fall behind on payments, the lender can repossess the property that originally secured the debt. An additional drawback to secured debt is the fact that you may remain liable for the deficiency balance owing on the debt after your property has been repossessed and sold.

However, the laws regarding home mortgages vary from state to state. This means that a lender's debt recovery rights will depend on the terms of your mortgage and whether any other lenders also have an interest in the property.

Unsecured debt is debt in which you borrow from a creditor to obtain goods or services on credit in exchange for your promise to repay the debt. The primary difference between secured and unsecured debt is that unsecured debt is not collateralized by personal property.

Unsecured debt is commonly given in the form of credit card debt, commercial debt, medical debt, and personal loans. If you fall behind on an unsecured debt, lenders can take legal action against you, but more commonly will try to work out a reasonable debt settlement. It is possible for a secured debt to become an unsecured debt when the property that is securing the loan has already been repossessed and sold by the creditor.

Traditionally, if the sale of the property does not cover the full amount of the debt, it will result in a deficiency balance which is still the responsibility of the consumer. This deficiency balance is now considered an unsecured debt because no property is securing it. In many cases, this balance can be successfully resolved through a debt settlement program.

Alan Barnes IAPDA Certified Debt Arbitrator and President and CEO of Debt Regret
http://www.debtregret.com

Article Source: http://EzineArticles.com/
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One-on-one negotiations with your creditors and bona fide offers to settle an account cannot typically begin until you have funds available.

Once you have sufficient funds in your savings account (or have access to funds through any other means) Certified Debt Arbitrators begin presenting offers to your creditors. They often begin with offers as little as 15% on the dollar. At the very least, these low offers show good faith and begin to open the doors to dialogue and counter offers.

First, an offer is presented to your creditors by a trained negotiator, usually one that already has a relationship with the creditor. This offer may be accepted or a counter offer may be offered by your creditors.

If the creditor accepts the offer (subject to our client’s final approval) or if a counter offer is reasonably in the ball park that it should be, the Certified Debt Arbitrator will contact you to inform you of the offer. They may also offer their opinion if they think the offer is good for the particular creditor or if they feel you should consider holding out for a better offer.

Opinions are based on experience with hundreds, perhaps thousands of previous negotiations and previously approved agreements; therefore, you can rely heavily on their opinion.

You always have the final decision to accept or reject any offer. Once, you agree to accept the settlement offer you will need to provide the Certified Debt Arbitrator your written permission to enter into the agreement and obtain a written settlement agreement from your creditor.

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