{"id":23001,"date":"2026-01-22T22:04:59","date_gmt":"2026-01-22T22:04:59","guid":{"rendered":"https:\/\/budgetadirect.com\/?p=23001"},"modified":"2026-01-22T22:05:00","modified_gmt":"2026-01-22T22:05:00","slug":"why-debt-relief-typically-doesnt-handle-secured-debt","status":"publish","type":"post","link":"https:\/\/budgetadirect.com\/?p=23001","title":{"rendered":"Why Debt Relief Typically Doesn\u2019t Handle Secured Debt"},"content":{"rendered":"
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Debt relief companies work on your behalf to negotiate your debts, usually through a settlement for less than you owe. While this can be a useful tool for some types of debt, not all debt can be handled through debt relief.\u00a0<\/p>\n

In addition to the type of debt, your ability to pay the debt back also matters when you sign up for a debt relief program. Always consider your other financial obligations before agreeing to a debt repayment plan through debt relief or another program.<\/p>\n

The difference between secured vs. unsecured debt<\/h2>\n

There are two types of debt you should be aware of: secured and unsecured debt.<\/p>\n

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Secured debt<\/dt>\n
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Secured debt is any debt that is backed by an asset, such as a mortgage or auto loan, where the creditor can seize that asset if you default on the loan. This helps the lender recoup losses, but you may still be responsible for additional payment if the collateral\u2019s value wasn\u2019t enough to cover the outstanding balance.<\/p>\n<\/dd>\n<\/div>\n

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Unsecured debt<\/dt>\n
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Unsecured debt is not backed by an asset, so the lender will recoup payment in other ways if you default, such as sending it to a credit collection agency. They may also sue you in court, resulting in wage garnishment or a lien on your property.<\/p>\n<\/dd>\n<\/div>\n<\/dl>\n<\/div>\n

Examples of secured debt<\/h3>\n