What is Consumer Debt?
Consumer Debt is a type of debt that is defined as any nature of outstanding or unfurnished repayments of goods or services provided to an individual or entity whose origins were formulated within the commercial marketplace; although this classification may appears as broad or vague in nature with regard to the determination process implemented with regard to identifying an individual debt as a Consumer Debt, the financial and credit industry has created parameters and conditions that may be utilized in order to classify individual debt. While certain debt arises with regard to the undertaking of goods, services, and amenities considered being required for individual survival – these include food, water, clothing, and shelter – Consumer Debt is oftentimes referred to as outstanding debt incurred regarding goods or services purchased existing outside of basic need.
Terms and Conditions Associated with Consumer Debt
Within the realm of debt management and financial assessment concerning the terms and conditions of Consumer Debt, the following legal and financial classification parameters are amongst the most commonly utilized:
Unsecured Consumer Debt
Unsecured debt is defined as a type of debt that is not backed by collateral; unsecured debts typically result from unsecured loans, which – in conjunction to their title, retain decreased security with regard to their repayment; furthermore, the furnishing of an unsecured loan greatly increases the risk of defaulting on, or failure to repay the loan in question:
Secured Debt increases probability of the repayment debt through the establishment of a decreased risk of financial loss undertaken by the individual lending institution; through the requirement of collateral furnished to the lending institution upon the receipt of a secured loan, the presence of collateral with regard to secured debt allows the lending institution the ability to repossess or reclaim the product or service named as collateral within the expressed terms and condition of the loan furnished
Repossession is the legal procedure within which the owner of a defaulted debt will be eligible and permitted to reclaim the item in arrears from the possession of an individual debtor
Credit Ratings are legal and administrative expressions reflecting the financial history and activity associated with an individual; consumer debt may render adverse affects on individual credit ratings
Consumer Debt Legality
The standards and practices comprising statutory legislation and legal requirements associated with Consumer Debt may range with regard to jurisdictional locale, applicable stipulations, and supplemental legality concerning the administration process of outstanding debt:
Financial law addresses administrative policies and individual rights associated with all matters and affairs concerning the management of financial instruments including loans, monies, assets, investments, and Consumer Debt
Consumer Debt falls under the additional legal jurisdiction of consumer law, which is defined as the legal field responsible for the legislative administration and oversight of activity taking place within the consumer marketplace; with regard to consumer debt, consumer law addresses all matters and affairs within which commercial vendors and the consumer public participate in the sale, purchase, and exchange of goods and services