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 South Dakota, 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 recover the owed amount. Credit cards, medical bills, and personal loans are common examples of unsecured debt. When a debtor fails to pay an unsecured debt, the creditor may attempt to collect the debt through collection agencies, or by filing a lawsuit. If the creditor wins the lawsuit, they may obtain a judgment which can lead to wage garnishment or levying bank accounts, but they still cannot claim specific property without additional legal action. It's important to note that while unsecured creditors have fewer immediate remedies compared to secured creditors, failing to pay unsecured debt can still have significant legal and credit consequences for the debtor.