When you start looking into debt reduction, you will often come across new and unfamiliar vocabulary. One of these terms is " unsecured debt." For instance, many debt reduction companies will tell you that they only work with unsecured debt. That's great, but what does that mean?

Unsecured debt includes debts not connected to personal property or items that you own. If you stop paying these debts, creditors can legally take action against you to collect them, but they cannot usually seize your property. On the other hand, with secured debts, they can.

Auto loans and mortgages are examples of secured debts. Unsecured debts include credit cards, medical bills, old utility bills, and student loans. These are the types of debts most debt reduction companies can work with. Though there are some exceptions when it comes to student loans. For example, government education loans may not qualify.

If you are not sure how much of your debt will qualify for debt reduction plans, the best thing to do is ask. Credit counselors and debt negotiation firms will be happy to assist you. They can give you more information about plans to reduce debt.