[hundt]

Ah, I think you have a misunderstanding about what collateral is. Collateral is not generally a limitation on the lender's ability to collect the debt. In some specific cases (like certain home loans in certain states) the law adds this limitation but generally collateral is just something the lender can take in the event of default.

To bring up the car loan example you mentioned earlier, if you decide after a year that you don't want your car anymore you can't just drive it to your bank and drop it off instead of paying off the rest of the loan. If you stop paying it they can repossess it but you will still owe whatever is left on your loan balance after they auction it.