Understanding your debt and who and what may be involved in that debt can greatly improve your ability to handle financial challenges that may arise.

Who Is Involved In My Debt?

• Debtor - Any individual that uses credit cards, holds a personal loan, is paying on a home mortgage, or borrows money from another company or individual with an agreement to repay the credit or loans over some period of time, typiclally with interest.
• Creditor - A bank, mortgage lender, credit company, retailer or other business that extends credit or issues loans to consumers.
• Debt Collector - Any individual, including attorneys, who regularly collects debts owed to others.
• Third-party Financial Assistance - Any credit repair, debt consolidation, credit counseling, or other agency offering financial assistance to individuals. Some agencies are not-for-profit, funded by communities, governments, or even creditors.

What Are The Two Types of Debt?

• Secured Debts - This type of debt is generally tied to an asset, such as a car for a car loan, or a house for a mortgage. When the consumer misses payments, the lender may repossess the asset.
• Unsecured Debts - Unsecured debts are not tied to any asset. This type of debt includes credit card debt, signature loans, medical bills, and debts for other types of service.

What Are My Debt Options and Resources? If you find yourself in financial trouble, you can look to a number of options and resources for help. Your options range from simple solutions, like budgeting, to last resort options such as bankruptcy. Based on your type and level of debt, your self-discipline, and your future financial outlook, you can determine what is the best option for you.