Where the creditor does not take any security interest in any assets of the debtor's, the creditor is said to be unsecured.   Like in secured situations, when the debtor fails to make a payment, the creditor may entertain restructuring the relationship or attempt another non-judicial workout.   However, the unsecured creditor must be cautious in continuing to extend credit to a delinquent debtor in hopes of sparking a financial turn around with the debtor, whether an individual or a company.  Throwing good money to bad can result in the debtor also pulling the creditor down with it.  

Dealing with consumers and businesses differs in that consumers are traditionally entitled to additional notices of default with the right to cure any such default.  Practically, a creditor may wish to provide both businesses and consumers with the right to cure.  Non-judicial resolutions can result in a substantial savings of time and resources to the creditor and significant fees to the debtor.

Unfortunately, non-judicial solutions do not always work and the creditor must resort to the court system to recover any outstanding obligation.  As set forth above, before the institute of a lawsuit, the creditor, depending on the situation, may have to provide the debtor with a notice of default and a right to cure.   Upon the expiration of the cure period a lawsuit is initiated seeking damages.   Once the process has started, it may take some time depending on how rigorously the debtor defends the matter.  Once a judgment is achieved, the judgment acts as a lien against certain real property and execution against most assets may be initiated against the debtor.

Our goal is to efficiently and effectively protect your rights and promote your interests.  We offer a variety of ways to handle matters for our clients.

For more information contact us.

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