How does the debt collection process work on an unsecured loan?
The debt collection process for an unsecured loan works very similar to that of unsecured credit. Banks and Financial Institutions will contact the debtor initially in an effort to work out a repayment plan and resolve the debt. If they are unsuccessful in getting a response from the client, the debt will be transferred to a collection agency which will began to place aggressive and threatening calls and letters. Usually, these letters indicate failure to response will result in more serious action being taken, which usually means additional interest or penalty fees. If you fail to response after a certain period of time and the debt is rather large, a judgment can be placed against you in which certain assets can be seized to satisfy the debt. However, there are many exemptions which vary by state. It would be helpful to speak to a Debt Settlement Attorney to negotiate a settlement.