Collections refer to debt, and there are two types of debt; secured and unsecured. With secured debt, the borrower pledges to secure payment of the loan. So, for example, if he does not pay for materials or services used to improve his property, the creditor can place a lien on the property as a result of the failure to pay the secured debt. Foreclosure, a method of collecting amounts owed on real property, follows strict statutory procedures. The repossession of secured personal property usually follows the state Uniform Commercial Code (UCC). To collect an unsecured debt, for which there is no property pledged to secure the loan, the creditor may have to hire a collections agency or file a lawsuit. Unsecured debt collections may require more involvement and tactics to obtain the unsecured debt payment. Find more information here in the collections practice center.
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