In Colorado, an "unsecured" debt is any debt for which you haven't pledged collateral and for which your lender has not obtained a lien against you. If your debt is unsecured, your lender cannot repossess or seize any of your property if you're unable to pay your bill. For examples of "secured" debts, check out this companion blog post: What is a Secured Debt? Although Colorado law prohibits lenders from repossessing your personal property if you default on payments, your lender can still sue you to collect the unpaid balance. With the exception of taxing agencies and student loan creditors, your lender must first sue you in Colorado State Court and get a money judgment before they can go after your personal property or garnish your wages. Most debts are unsecured. The most common types of unsecured debts are listed below: Credit and charge card purchases and cash advances Department store credit cards unless the store retains a "security interest" in the items you buy or requires you to sign a security agreement. If you gave the lender a security interest when you signed your loan papers, these debts are "secured." Gasoline company credit card purchases Back rent Medical bills Alimony and child support Student loans Utility bills Loans from friends or relatives unless you signed a promissory note secured by some of property, as collateral Health club dues Lawyers' and accountants' bills Church or synagogue dues Union dues
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