3

When I have an unsecured line of credit, it is not backed by any assets I hold (e.g:car). So if I fail to pay it back because I lose my job, how will the bank get its money back?

11

The bank will sell your debt to a collection agency, that will then follow you everywhere you go and demand payment. They will put a negative notice on your credit report preventing you from getting any new credit, and might sue you in court and take over some or all of your assets through court judgement.

|improve this answer|||||
  • 1
    Ok if they are able to take over my assets, then how is it 'unsecured'. I did not secure my line of credit with any assets. Thank you for the response. – Victor123 Feb 13 '13 at 21:26
  • 7
    @Kaushik for secured loan they can take the asset used to secure the loan, and they don't need court judgement. – littleadv Feb 13 '13 at 21:33

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.