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unsecured debt

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 Kentucky, as in other states, unsecured debt refers to obligations that do not have specific property, such as real estate or personal property, serving as collateral. Credit cards, medical bills, and student loans are common examples of unsecured debt. If a debtor fails to repay an unsecured debt, the creditor cannot automatically take possession of any assets. Instead, the creditor may need to file a lawsuit and obtain a court judgment. After a judgment is awarded, the creditor might be able to garnish wages, levy bank accounts, or place liens on property, subject to state exemptions and federal law. Kentucky's statutes outline the process for creditors to collect on unsecured debts, including the statute of limitations for debt collection, which is generally 5 years for written contracts and 15 years for judgments. It's important to note that while creditors have these legal avenues, there are also consumer protections in place, such as the Fair Debt Collection Practices Act (FDCPA), which governs the behavior of debt collectors and provides consumers with rights to dispute and obtain validation of debt information.

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Creditor / Debtor

unsecured debt

Individual & Family Legal Plan

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Kentucky State Code

Kentucky State Code

Creditor / Debtor

unsecured debt

Articles