Creditors in Tennessee have a variety of options for recovering their losses when their debtors fail to make good on their loans. Depending upon the type of loan that the creditor offered to their debtor, they may have different remedies for being made whole. For example, when a creditor offers their borrower a secured loan and it falls into delinquency, that creditor may pursue their losses as secured debt.
Secured debt is debt that is attached to a particular item or piece of property. When a Jackson resident takes out a loan in order to buy a car, that loan may be considered secured as it is attached to the car. If the borrower of the car loans stops making payments toward the satisfaction of their debt, their creditor may have the right to reclaim the vehicle attached to the loan in order to cover some of their losses.
This may also happen when a person defaults on their mortgage or commercial real estate loan. The lender who funds the borrower's purchase of real property retains a right to reclaim the parcel that is attached to the loan. When multiple creditors are competing for repayment from a debtor, secured creditors are often given priority and may receive repayment sooner than others.
Seeking the repayment of a loan in default can be difficult on a lender who depends on fair dealings to maintain their business interests. When dealing with unpaid secured debts, creditors may wish to consult with their business attorneys to talk out their collections options. Different options may be available to different creditors and therefore this post should not be read as specific legal advice.