Debt

Debt is nothing new to anything American. The national debt is steadily on the rise and speeding up. The American consumer has loads of debt.

Consumer debt has paid for our cars, education, vacation, home, furniture, small purchases, and even that brand new flat screen TV we got from Best Buy.

This post has been developed as a debt resource.

Debt Basics

Debt is money that is owed to a creditor. There are two main forms of debt. There is unsecured debt and secured debt.

Unsecured Debt – This is money owed from loans given on only the good faith that the borrower, or debt holder, will pay back the loan as agreed.

The creditor will charge a higher interest rate for unsecured debt because the lender takes on more risk. The increased risk stems from the lack of collateral thus the lender has fewer options to collect if the debt goes unpaid.

Secured Debt – This is money owed on a loan that is secured or ensured by some sort of asset that the creditor will eventually have the rights to sell if the secured loan goes unpaid.

Debt and the Current Economy

The landscape and environment which houses debt has  and continues to change with the struggles of the current economy.

For instance for the first time in a long time American consumers are starting to save. Levels of consumer credit are declining. One could argue that the recent brush with economic collapse has taught the consumer a lesson or two about debt and personal finance.

Though many consumers and homeowners have had to obtain debt help and assistance to get control of their finances the actions and habits of consumers is on the up and up.

Debt management is finally becoming a large concern of the masses.