The unsecured creditor extends credit on the faith of the buyers/debtors ability and willingness to pay. If the debtor fails to pay, the creditor has legal means to receive payment from the debtor. If the debtor does not pay voluntarily, the creditor has a few options to take. Unsecured debt are things like credit cards, medical bills and student loans.
Asking for Payment
The seller/creditor will probably begin by calling the debtor and asking for the payment. Emails, texts and sending letters through the mail asking for payment may soon follow.
If no response from the debtor, or if they fail to follow through with promised payments, the next action may be to contact a collection agency who will make further efforts to receive the debt. Laws are governing the tactics of the creditor or a collection agency attempting to recover the debt. They may not harass, abuse or coerce the debtor into making the payments. If the collection actions violate a consumers rights, the debtor/buyer may be entitled to receive punitive damages from the agencies involved.
If previous actions failed to get payment from the debtor, the creditor might decide to sue the debtor. An attorney for the seller files and serves a complaint, and unless the buyer/debtor disputes the debt the case proceeds to judgment.
Even if the creditor has the courts authority to collect on the debt, successful payment depends on the debtor’s income, savings, or other assets to seize. If there is no source to derive money for the debt, the creditor can either hire an investigation firm to try to locate possibly hidden assets or patiently wait until the debtor eventually acquires property. Eventually, the judgment will reach the end of its term and expire without successful resolution.
If you are have fallen behind on your debts and the creditors are threatening to file a lawsuit, contact a Dallas bankruptcy attorney so you can get the protection you need without worrying if years down the line your assets may be seized.