Secured Debt

• If a debt is secured by property--for example, an auto loan--the creditor or collection agency can repossess it if you do not make arrangements to repay the debt. In most cases, the collection agency must go to court and get a judgment before it can repossess the property. Depending on state law, the creditor may repossess your vehicle without a court order if you consent to the repossession.
  
  

Credit Card Purchases

• Credit card purchases are unsecured debts. When you use a credit card, you are taking out a loan to pay for goods or services. Thus, you owe credit card debt to your credit card company, not to the company you purchased goods from. If you do not pay your credit card bill, your creditor has the right to collect the money it lent you. It does not usually have the right to repossess your goods, as they have already been paid for.
  
  

Illegality of Threats

• It is against the law as of 2011 for creditors or collection agencies to issue empty threats to pressure debtors into paying back debts. If a debt collector threatens to take your property, ask for a copy of the court order allowing him to do so. If the debt collector cannot provide a copy or continues making empty threats, report him to the Federal Trade Commission and your state's attorney general for unfair debt collection practices.
  
  

Avoiding Repossession

• The best way to avoid having your property repossessed is to pay all secured debts on time or make payment arrangements if you cannot pay your debts. If a collection agency goes to court and gets an order of repossession, you may be able to halt the repossession by paying the balance you owe on the property in full plus the creditor's repossession fees.