Unsecured debt is debt for which a creditor holds no collateral that they can take back if the debtor fails to pay, such as credit cards, department store cards, medical bills, legal bills, personal loans, cellular telephone bills, health club membership fees, signature loans and student loans. With unsecured debt collection, agencies act as agents for creditors. They collect debts and may even have the authority to commence legal proceedings. Most unsecured debt collection agencies will request payment on your behalf in full when they first contact you because most debts include a clause that renders the remaining amount of debt immediately due and payable if the payments on the debt are made late or not received at all.

The agency may also indicate possible courses of action they could undertake to recover the debt, such as court action. Since a creditor usually has the right to sue if payments are made late, stating that possibility is not considered harassment.

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