Unsecured debt is debt that is not secured or collateralized by specific assets that the lender or creditor may attach if you fail to repay the debt. For example, your credit card is an unsecured line of credit.
In Indiana, unsecured debt refers to obligations that do not have collateral attached to them. This means that if a borrower defaults on the debt, the creditor does not have an immediate right to seize specific assets to satisfy the debt. Common examples of unsecured debt include credit card debt, medical bills, and personal loans. If a borrower fails to repay unsecured debt, the creditor may attempt to collect the debt through other means, such as contacting the borrower for payment, reporting the debt to credit agencies, or filing a lawsuit. If the creditor wins the lawsuit, they may obtain a judgment, which could lead to wage garnishment or bank account levies. However, the creditor must follow the legal process and cannot directly take the borrower's property without a court order. Indiana's statutes and federal laws, including the Fair Debt Collection Practices Act (FDCPA), provide certain protections to consumers from abusive debt collection practices.