There are two types of debt - secured debt and unsecured debt.  Secured debt exists when the credit is backed up with collateral, such as a house serving as collateral for one’s mortgage.  It also exists when the creditor files a security interest in the property.  When someone falls behind on this type of debt, the creditor has a right to come in and take the collateral back.  An example would be a bank repossessing and foreclosing on a house of someone who falls behind on their mortgage payments.

With unsecured debt, the options available are a little different.  Since the creditor does not have a secured interest in the property, one is limited to trying to collect the funds owed, via a collections agency or by filing a lawsuit.

• Repossession of the property
• Hire or use an internal collections agency
• Foreclosure (on real estate)
• Obtain a security interest in the borrower's property
• Bring a lawsuit against the borrower
• Place a lien upon the property of the borrower
• Wage garnishments

These methods are only available after a debtor has actually defaulted on a payment or payments to the creditor.  Lawsuits, foreclosures, bankruptcies, and other forms of legal action can often be avoided by talking with a skilled debtor / creditor attorney.