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 Ohio, 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 any specific property to satisfy the debt. Common examples of unsecured debt include credit card debt, medical bills, and personal loans. Creditors may still pursue repayment of unsecured debts through legal means such as filing a lawsuit. If the creditor wins the lawsuit, they may obtain a judgment which can lead to wage garnishment, bank account levies, or liens on property. However, the process to collect on unsecured debt is more complex and time-consuming than for secured debt, where collateral can be more readily claimed. Ohio's state statutes and federal law outline the procedures and limitations for collection actions on unsecured debts, including the statute of limitations for debt collection, which is generally six years for written contracts and four years for oral contracts in Ohio.