Unsecured debt is debt that is not secured or collateralized by specific assets that the lender or creditor may attach if you fail to repay the debt. For example, your credit card is an unsecured line of credit.
In Texas, unsecured debt refers to obligations that do not have collateral attached to them. This means that if a borrower defaults on the debt, the creditor does not have an immediate right to seize any specific property to satisfy the debt. Common examples of unsecured debt include credit card debt, medical bills, and personal loans. Creditors may still pursue repayment of unsecured debts through legal means such as filing a lawsuit and obtaining a judgment. Once a judgment is obtained, a creditor may be able to garnish wages (although there are significant restrictions on wage garnishment in Texas), levy bank accounts, or place liens on non-exempt property. However, Texas has strong debtor protection laws, including generous exemptions for personal property, homestead, and certain types of income, which can limit a creditor's ability to collect on unsecured debts.
