Unsecured debt could be credit card debt, medical bills, student loans, personal loans, or even unpaid taxes. Too much unsecured debt can make it increasingly difficult to pay other bills each month.

Credit card statement reporting changes made in early 2010 demonstrated to the consumer what a trap credit card balances can be.  Making only minimum payments each month may mean that the credit card will not be paid off for decades, if at all.  In addition, many credit card companies raised interest rates to 20% or more, regardless of whether the card holder was ever late on a payment.

Another recent phenomenon has been for consumers to pay credit card bill each month, even if it means missing the mortgage payment.  Many financial experts were perplexed by this trend, until they found out why this was happening.  If a card holder had more room on his credit limit, paying on the card allowed him another month of treading water, even as the house was falling into foreclosure.

For ideas on what can be done about out of control unsecured debt, please see the Solutions section of this website.